WEBVTT - Baseball Owners Score Big Win 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanovik. We're here every day bringing 0:00:07.320 --> 0:00:09.799 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.120 --> 0:00:20.000 analysts in more than one twenty countries. You can download 0:00:20.040 --> 0:00:23.239 Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.440 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.880 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:32.240 YouTube search Bloomberg Clovel News. Let's get right to our guest. 0:00:32.280 --> 0:00:35.360 Lucky for us, he's back again. Andy Kurtzig's founder and 0:00:35.560 --> 0:00:39.400 CEO of Just Answer. Just Answer. It's based in San Francisco. 0:00:39.560 --> 0:00:42.760 It helps connect people with experts for professional advice. Uh. Andy, 0:00:42.800 --> 0:00:44.360 it's good to chat with you again. We talked to 0:00:44.360 --> 0:00:46.600 you just a few weeks ago. Because you have such 0:00:46.600 --> 0:00:50.720 a large portion of your your staff in Ukraine, two 0:00:50.840 --> 0:00:53.880 hundred plus employees in Ukraine, I just want to start 0:00:53.920 --> 0:00:55.400 with how how are they doing right now and what 0:00:55.440 --> 0:00:59.240 are they doing well? So they're all live and uh 0:00:59.280 --> 0:01:01.200 and doing as well they could possibly be doing in 0:01:01.240 --> 0:01:04.080 the situation that we're in. So all of our preparations 0:01:04.080 --> 0:01:05.880 have paid off. We've been asking to keep them all 0:01:05.880 --> 0:01:08.520 safe and so far it's working. And you in your 0:01:08.520 --> 0:01:11.280 notes you said that six of them are currently fighting, 0:01:11.360 --> 0:01:14.920 and those who are fighting are still being paid a salary. Yeah, 0:01:14.959 --> 0:01:17.080 so what we what we promised to them even before 0:01:17.120 --> 0:01:19.639 the war started, when we thought that this might happen, 0:01:19.760 --> 0:01:22.120 was we'd pay them fifty percent of their salary in 0:01:22.160 --> 0:01:24.039 addition to the sellary and they get for being in 0:01:24.040 --> 0:01:26.560 the military, and then we guarantee their jobs when they 0:01:26.600 --> 0:01:28.720 come back, because hey, and if we can take a 0:01:28.760 --> 0:01:31.119 step back, um, and we're grateful that you've given us 0:01:31.120 --> 0:01:34.360 some time. What are you here, I mean, it's hard 0:01:34.360 --> 0:01:36.920 for any of us, UM, I think in terms of 0:01:36.959 --> 0:01:38.760 some of the atrocities that we're seeing in some of 0:01:38.760 --> 0:01:41.039 the news coverage of what's going on in Ukraine right now. 0:01:41.280 --> 0:01:44.440 What are you hearing, um from your team members who 0:01:44.440 --> 0:01:48.880 are on the ground in Ukraine. I'm hearing pretty much 0:01:48.880 --> 0:01:51.120 what you're seeing in the news, which is it's dreadful. 0:01:51.200 --> 0:01:54.480 It's terrible. I mean the that that seeing the bodies 0:01:54.840 --> 0:01:58.960 and the torture and the reality now that they've taken 0:01:58.960 --> 0:02:03.320 back some of their territories near Kiev is just awful, 0:02:03.520 --> 0:02:07.000 I mean, and they're horrified for those who the rest 0:02:07.000 --> 0:02:09.040 of the world is. For those that have stayed on 0:02:09.080 --> 0:02:13.079 the ground um and decided not to leave Ukraine, why 0:02:13.200 --> 0:02:18.160 is that, Well, so a few reasons. I mean. So 0:02:18.240 --> 0:02:21.320 we have of the two eight now employees that we 0:02:21.360 --> 0:02:23.880 have in Ukraine, thirty nine of them have We've been 0:02:23.919 --> 0:02:27.480 able to get them out, but the rest either they 0:02:27.520 --> 0:02:30.400 can't get out because of there are men between eighteen 0:02:30.440 --> 0:02:32.280 and sixties, it's against the law for them to leave 0:02:32.320 --> 0:02:35.920 the country. And then we've got people that that you know, 0:02:35.919 --> 0:02:39.080 maybe their spouse or their their family members are stuck 0:02:39.080 --> 0:02:40.480 there and so they don't want to leave either. So 0:02:40.600 --> 0:02:42.840 some of the women are staying by the side of 0:02:42.919 --> 0:02:46.160 the men that are forced to stay in Ukraine. And 0:02:46.160 --> 0:02:48.120 then we've even got like what the woman that leads 0:02:48.120 --> 0:02:52.120 their office in Ukraine, her son just turned eighteen, so 0:02:52.160 --> 0:02:54.240 he can't leave, and so she's not leaving her son behind. 0:02:55.440 --> 0:02:57.760 What's the message that that you want to send to 0:02:58.919 --> 0:03:01.760 other people? And still can Valley other Americans who are 0:03:01.840 --> 0:03:05.760 here in the United States and really just just watching 0:03:05.760 --> 0:03:07.680 this play out. I mean, I think a lot of 0:03:07.680 --> 0:03:10.800 people have this feeling that well, Okay, the government is 0:03:10.800 --> 0:03:12.800 doing what it can do. There's only so much I 0:03:12.800 --> 0:03:17.760 can do. You know. The first thing is that this 0:03:17.840 --> 0:03:22.560 suspects all of us. This is not some small skirmish 0:03:22.600 --> 0:03:26.920 in Eastern Europe. This is about democracy and about freedom 0:03:26.960 --> 0:03:29.280 and East versus West. This is everything that we worried 0:03:29.280 --> 0:03:33.400 about during the Cold War. It's actually happening now. And 0:03:33.639 --> 0:03:35.360 you know, this aspects all of us, and so we 0:03:35.400 --> 0:03:39.080 all need to do our part to help. You know, Andy, 0:03:39.200 --> 0:03:41.400 I do wonder too. And obviously you're doing everything and 0:03:41.440 --> 0:03:44.040 anything you can to help UM your team that are 0:03:44.040 --> 0:03:48.440 there in Ukraine. How do you though our audience, a 0:03:48.480 --> 0:03:51.880 business investing audience as well, obviously caring though about the 0:03:51.960 --> 0:03:55.960 humanitarian aspect. But when you look at the market over 0:03:56.000 --> 0:03:59.840 in Europe, you know, will this ultimately lead to kind 0:03:59.840 --> 0:04:03.960 of business rethink about exposure, whether it's in Ukraine, whether 0:04:04.000 --> 0:04:07.160 it's Russia, Like, how what's what's the what is it 0:04:07.320 --> 0:04:11.000 the longer lasting UM strategy that stays with us because 0:04:11.040 --> 0:04:14.880 of this? Yeah, so we've already seen lots of companies 0:04:15.480 --> 0:04:19.000 boycotting Russia. And hopefully more will continue to do that. 0:04:19.800 --> 0:04:24.800 And you know, as this goes on, what my hope 0:04:24.960 --> 0:04:27.920 is that companies will not just think about boycotting Russia 0:04:27.960 --> 0:04:31.080 but also buying Ukrainian goods and services. I mean, this 0:04:31.120 --> 0:04:34.880 war is about you know, Russians aggression and bombs and tanks, 0:04:34.880 --> 0:04:37.880 but it's also about the economy and sanctions, and we 0:04:37.920 --> 0:04:41.400 can all do a part to help the Ukrainian side 0:04:41.400 --> 0:04:43.920 of this. And so that's what just Answers trying to do, 0:04:44.000 --> 0:04:47.039 and I hope any other companies will do it as well. Andy, 0:04:47.040 --> 0:04:49.320 you and your family are actually planning to go to 0:04:49.480 --> 0:04:52.400 the border of Ukraine. This is a mission to deliver 0:04:52.520 --> 0:04:56.720 medical aid, body armor, laptops and more. Um, you're taking 0:04:56.720 --> 0:05:00.120 your kids. Why why is this important to you? Well, so, 0:05:00.200 --> 0:05:02.479 when my family and I got together a few weeks 0:05:02.480 --> 0:05:04.719 ago and we're deciding what we wanted to do for 0:05:04.760 --> 0:05:07.440 spring break. You know, normally we would go to Hawaii, 0:05:07.440 --> 0:05:10.960 where my mom lives and we love. We just couldn't 0:05:11.000 --> 0:05:14.200 bear to go somewhere fun for spring break when our 0:05:14.760 --> 0:05:18.160 friends and colleagues and the people of Ukraine are suffering 0:05:18.200 --> 0:05:21.120 so much. And so we got together, the family, and 0:05:21.160 --> 0:05:25.120 we decided that we wanted to go and help. Is 0:05:25.160 --> 0:05:27.480 there a message in terms of the governments that are 0:05:27.520 --> 0:05:29.880 out there who have already imposed a lot of certainly 0:05:29.920 --> 0:05:32.720 economic and business sanctions, as you mentioned, a lot of 0:05:32.760 --> 0:05:36.760 companies pulling out. Um, what more do you think should 0:05:36.760 --> 0:05:39.839 be done at this point? Well, I mean they should 0:05:39.839 --> 0:05:42.599 continue to escalate the sanctions. They should continue to send 0:05:43.520 --> 0:05:51.200 military equipment and and any humanitarian supplies as well. So 0:05:51.520 --> 0:05:53.360 there's a lot more to be done. I mean, they've 0:05:53.360 --> 0:05:55.200 got a lot of people in Ukraine that are ready 0:05:55.200 --> 0:05:58.279 and willing to fight, but they need the the supplies 0:05:58.320 --> 0:06:01.800 in order to maintain the this war and too and 0:06:01.839 --> 0:06:05.840 to beat back Russia and for democracy. They're fighting for 0:06:05.880 --> 0:06:08.480 our democracy just as much as their own. And the 0:06:08.680 --> 0:06:10.960 less less bit of time with you just about thirty 0:06:10.960 --> 0:06:14.000 seconds left. What's your message to to other CEOs who 0:06:14.200 --> 0:06:17.880 have employees in Ukraine right now or thinking about hiring 0:06:17.880 --> 0:06:21.920 in Ukraine? As we know it's a huge tech hip. Absolutely, 0:06:21.920 --> 0:06:23.360 I think that I think they should go for it. 0:06:23.400 --> 0:06:25.800 I mean, we we had some offers outstanding when the 0:06:25.839 --> 0:06:28.200 war started. We've honored those offers. We've actually hired a 0:06:28.200 --> 0:06:30.599 few more people since the war started. You know, We're 0:06:30.640 --> 0:06:32.760 trying to support the economy as much as we can 0:06:32.839 --> 0:06:35.600 and and hiring people there is one of the best 0:06:35.600 --> 0:06:38.080 things we can do. You know, Unfortunately most of the 0:06:38.160 --> 0:06:42.240 Ukrainian economy is crippled right now. Right trucking business or 0:06:42.240 --> 0:06:45.120 a warehouse or you know, chocolate company, whatever it is, 0:06:45.160 --> 0:06:48.240 you're probably not operating. But I can kind of operate, 0:06:48.360 --> 0:06:50.599 and so we're able to support that we have to run. 0:06:50.640 --> 0:06:53.039 We wish you well, um safety on your journey, and 0:06:53.080 --> 0:06:56.000 your family are well as well. Andy Kurtzik of Just Answer. 0:06:56.360 --> 0:06:59.880 You're listening to Bloomberg Business Week with Carol Measure and 0:07:00.080 --> 0:07:04.440 Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. All right, 0:07:04.520 --> 0:07:05.880 for those of you even sticking around, we're going to 0:07:05.920 --> 0:07:08.840 finally do the great reveal. Almost almost the story is 0:07:08.880 --> 0:07:11.560 among the most read on the Bloomberg today and it 0:07:11.600 --> 0:07:14.600 involves probably the most followed individual on Wall Street. We're 0:07:14.600 --> 0:07:18.960 talking about Jamie Diamond, the JP Morgan Chase CEO and 0:07:19.360 --> 0:07:21.880 board chair. Is that with his annual letter he's calling 0:07:21.880 --> 0:07:24.840 for more sanctions on Russia, expresses pity for the Fed 0:07:24.880 --> 0:07:27.080 as well, says, hey, they got a tough task ahead 0:07:27.080 --> 0:07:29.400 of them. Hanna Levitt is finance reporter for Bloomberg Near. 0:07:29.480 --> 0:07:32.320 She joins us on the phone from New York City, Hannah, 0:07:32.480 --> 0:07:34.760 what is the before we get to the details here, 0:07:35.120 --> 0:07:37.520 what is the change in tone of this year's letter 0:07:37.600 --> 0:07:41.320 versus last year's letter? Hey, guys, thanks for having me. Um. 0:07:41.400 --> 0:07:44.840 The last year's letter, if you remember, gave a pretty 0:07:44.960 --> 0:07:49.760 rosy outlook. It was, you know, Jamie was saying this 0:07:49.800 --> 0:07:52.480 boom could run into three. He was saying, you know, 0:07:52.800 --> 0:07:56.280 everything could add up to a Goldilocks moment um. And 0:07:56.360 --> 0:07:59.600 so it's definitely a change in tone when you know, 0:07:59.600 --> 0:08:01.520 in the four four pages of the letter this year, 0:08:01.560 --> 0:08:04.800 he's you know, really breaking down all these massive issues 0:08:04.840 --> 0:08:07.880 that we're facing globally at the moment. Well, and so 0:08:07.960 --> 0:08:10.720 among those massive issues is of course the war. Talk 0:08:10.760 --> 0:08:12.200 to us a little bit more about what he said 0:08:12.240 --> 0:08:16.040 about the Russian war and invasion of Ukraine. Yeah, so 0:08:16.080 --> 0:08:19.360 he called for increasing sanctions UM in whatever way security 0:08:19.360 --> 0:08:23.040 experts recommend. And he also said that he's not worried 0:08:23.120 --> 0:08:26.320 about JP Morgan's exposure to Russia, but that it could 0:08:26.320 --> 0:08:29.600 cost the firm a billion over time UM and that 0:08:29.680 --> 0:08:32.160 the firm continues to look for secondary impacts are on 0:08:32.200 --> 0:08:33.960 the globe. And that's something that we've heard a lot 0:08:34.400 --> 0:08:37.840 in recent weeks, is that, you know, even if a 0:08:37.880 --> 0:08:41.640 firm may not have a huge impact right now, um, 0:08:41.679 --> 0:08:44.440 you know, it's kind of tv D on what could 0:08:44.440 --> 0:08:46.520 happen six months from now or what what kind of 0:08:46.600 --> 0:08:49.040 you know, how it will impact companies and countries and 0:08:49.320 --> 0:08:52.600 what impacts that will end up having having on these things. 0:08:52.800 --> 0:08:54.680 And a billion dollars is a lot of money to 0:08:54.720 --> 0:08:56.920 a lot of people, but over an extended period of 0:08:56.920 --> 0:09:00.120 time to you know, the bank with the most assets 0:09:00.160 --> 0:09:04.800 in the United States. Uh, is it is that a lot? Uh? 0:09:04.880 --> 0:09:12.360 No revenue projected for this year, right, it's a lot. Yeah. 0:09:12.400 --> 0:09:14.720 Well so then when he says that, though, it's a 0:09:14.760 --> 0:09:18.080 reminder that you know, when you're thinking about either the 0:09:18.120 --> 0:09:21.760 financial markets or economic growth, like little bits and pieces 0:09:21.760 --> 0:09:24.040 of things though from different places, whether it's the war, 0:09:24.200 --> 0:09:28.400 whether it's inflation, whether it's supply strain constraints or they 0:09:28.400 --> 0:09:33.520 were supply chain constraints. All of this though, it's important, right, Hannah, 0:09:33.760 --> 0:09:35.840 because I'm curious how you see it that it can 0:09:35.880 --> 0:09:41.760 add up to significant eating into economic growth. Yeah, for sure. 0:09:41.800 --> 0:09:44.000 I Mean one of his key points was about the 0:09:44.120 --> 0:09:47.600 energy crisis, which you know has been obviously influenced by 0:09:47.640 --> 0:09:51.000 the War Ukraine. Um. But it's exacerbating inflation. So that's 0:09:51.000 --> 0:09:54.160 just one of the examples of where we're seeing, um. 0:09:54.200 --> 0:09:57.280 You know, these big issues all being interconnected. Um. And 0:09:57.320 --> 0:10:01.480 he called for the US increasing energ reproduction and also 0:10:01.520 --> 0:10:05.000 getting more lergy to Europe immediately um and and wrote 0:10:05.000 --> 0:10:06.720 a bit about how he doesn't view it as mutually 0:10:06.720 --> 0:10:09.280 exclusive with longer term clean energy goals, which I also 0:10:09.320 --> 0:10:12.680 thought was interesting. Okay, let's get to monetary and fiscal policy, 0:10:12.880 --> 0:10:15.160 and I'm wondering about his comments with regard to the 0:10:15.160 --> 0:10:18.920 FED and what the FED has ahead of it in 0:10:19.040 --> 0:10:22.520 order to get inflation under control. Yeah, for sure. UM. Well, 0:10:22.559 --> 0:10:24.640 he said he does not envy the FED for what 0:10:24.640 --> 0:10:27.520 it has to do. Um. But you know, really his 0:10:27.559 --> 0:10:30.680 point was that in hindsight, all the fislan monetary stinglass 0:10:30.720 --> 0:10:35.960 in one was probably too much for too long. Um. 0:10:36.040 --> 0:10:38.080 And so he's predicting that the FED could raise rates 0:10:38.080 --> 0:10:41.240 more than the market currently expects or is pricing in 0:10:41.520 --> 0:10:43.480 and you know, if they get it right, there could 0:10:43.520 --> 0:10:46.640 be years of growth still, but the process will cause 0:10:46.640 --> 0:10:49.240 a lot of volatility either way. Um, and it's definitely 0:10:49.559 --> 0:10:53.160 challenging and the whole thing listen, this is your world, um, Hannah. 0:10:53.559 --> 0:10:56.080 You know, and Jamie Diamond, you know, when he speaks, 0:10:56.080 --> 0:10:57.760 we kind of sit up a little straighter and take 0:10:57.800 --> 0:10:59.599 notice of it. And it certainly he's always among the 0:10:59.600 --> 0:11:02.520 most on the Bloomberg. I do think he thinks about 0:11:02.559 --> 0:11:06.480 his words because he knows, um, that people do listen 0:11:06.559 --> 0:11:09.320 to what he says, you know, pretty closely. What was 0:11:09.360 --> 0:11:14.320 the most stark thing for you? Um? I think for 0:11:14.400 --> 0:11:17.319 me reading it just kind of the the tone change 0:11:17.360 --> 0:11:20.079 that we talked about at the beginning, um, compared with 0:11:20.200 --> 0:11:22.040 last year, and it's not you know, he still did 0:11:22.080 --> 0:11:24.640 say that, like the economy is in good shape, consumers 0:11:24.640 --> 0:11:28.000 and companies are still in the US, you know, flushed 0:11:28.000 --> 0:11:29.920 with cash for the most part. But it wasn't like 0:11:29.920 --> 0:11:32.280 he was saying everything is terrible by any means. Um. 0:11:32.360 --> 0:11:36.360 But you know, his his outlining of the challenges ahead 0:11:36.840 --> 0:11:38.960 don't really start to me to begin anything on whether 0:11:39.000 --> 0:11:41.840 he's going to stay there longer. What's his deal? Girl? 0:11:42.400 --> 0:11:47.640 More years? Always hashtag five more years? Um, exactly, Hannah, 0:11:47.679 --> 0:11:49.760 thank you so much. Really appreciated Hannah of it. She's 0:11:49.800 --> 0:11:51.760 financial reporter at Bloomberg News. As we said, this is 0:11:51.800 --> 0:11:53.600 among our most read on the Bloomberg has been all 0:11:53.679 --> 0:11:57.480 day on this Monday. There is the big reveal when 0:11:57.480 --> 0:11:59.600 people when he talks, people listen. But I think it's 0:11:59.600 --> 0:12:01.800 interesting at tone right, and we keep hearing about a 0:12:01.800 --> 0:12:04.920 lot more negative tone out there in terms of the outlook. Yeah, 0:12:04.960 --> 0:12:06.840 I think that's a real fair characterization. A lot has 0:12:06.920 --> 0:12:10.439 changed in just a year. Yeah, exactly. This is Bloomberg 0:12:10.520 --> 0:12:14.200 Business Week with Carol Messer and Bloomberg Quick Takes Tim 0:12:14.240 --> 0:12:18.559 Stenovic on Bloomberg Radio Opening day for Major League Baseball 0:12:18.640 --> 0:12:20.520 it's happening later on this weekend. With that in mind, 0:12:20.520 --> 0:12:23.280 Bloomberg Business Week tapping into who are the real winners 0:12:23.320 --> 0:12:25.800 already of the season. We'll give you a hand. It's 0:12:25.880 --> 0:12:28.280 not the players at this point. Joel Weber is editor 0:12:28.320 --> 0:12:30.400 at Bloomberg Business Week. He's with us in the Bloomberg 0:12:30.440 --> 0:12:33.839 Interactive Brokers studio. Ben Writer is a freelance contributor. He's 0:12:33.840 --> 0:12:36.040 also the author of astro Ball, The New Way to 0:12:36.080 --> 0:12:39.080 Win It All. He's a freelance contributor Bloomberg Business Week. 0:12:39.160 --> 0:12:41.080 He's his story is featured in the current issue of 0:12:41.080 --> 0:12:43.760 Business Week magazine. It's available on newsstands, on the Bloomberg 0:12:43.800 --> 0:12:46.560 and at Bloomberg dot com slash Business Week. So, Joel, 0:12:46.600 --> 0:12:48.560 they've got the most powerful union when it comes to 0:12:48.600 --> 0:12:53.240 pro sports. Why are their salaries falling? Though franchise values 0:12:53.280 --> 0:12:57.239 continue to go higher, they can't quite win the negotiation 0:12:57.360 --> 0:13:00.160 and in like a real, real meaningful way. And and 0:13:00.200 --> 0:13:03.200 obviously the lockout was something that um got all of 0:13:03.200 --> 0:13:06.320 our attention. And there's this labor element to it that 0:13:06.360 --> 0:13:10.199 I was really captivated by. Ben being a long time 0:13:10.600 --> 0:13:13.679 sports illustrated writer. Also, in addition to the book that 0:13:13.720 --> 0:13:17.120 you mentioned, he's uh hosted a podcast called The Edge 0:13:17.360 --> 0:13:20.360 UM and I basically you know, got him on the 0:13:20.360 --> 0:13:23.839 phone with um Max Chafkin colleague and said, you know what, 0:13:23.840 --> 0:13:25.600 what do you want to write about baseball? And I 0:13:25.640 --> 0:13:29.319 think you know he did this step back story. This 0:13:29.400 --> 0:13:31.400 is Opening day week, right, if you want to go 0:13:31.400 --> 0:13:34.000 watch baseball, it's finally going to start. And what been 0:13:34.040 --> 0:13:37.360 really I thought, this iscinctly summed up, was that the players, 0:13:38.040 --> 0:13:40.800 you know, you can root for millionaires or billionaires first 0:13:40.800 --> 0:13:43.320 of all, and the owners are the billionaires and the 0:13:43.320 --> 0:13:46.280 players are the millionaires. UM. So sympathies might lie a 0:13:46.320 --> 0:13:48.840 little bit more with the players at this point. But 0:13:48.840 --> 0:13:51.679 but really, um, they did not come out with the 0:13:51.760 --> 0:13:55.760 upper hand here, did they been. No, they didn't. And 0:13:55.880 --> 0:13:59.280 let's be clear, this is a hard thought labor negotiation, 0:13:59.400 --> 0:14:03.679 a nine nine day lockout. The players union were resolute, 0:14:04.200 --> 0:14:08.040 they had solidarity, and they did emerge with some games. 0:14:08.120 --> 0:14:13.480 You know, the minimum salary for players went up quite significantly. Um, 0:14:13.800 --> 0:14:16.439 But overall, this is a case in which the owners 0:14:16.920 --> 0:14:20.400 maintained the upper hand in a business that, despite everything 0:14:20.440 --> 0:14:24.520 you've heard about baseball's decline, is booming. Revenues exceeded ten 0:14:24.600 --> 0:14:29.320 billion dollars in twenty nineteen, while player salaries went down. 0:14:29.400 --> 0:14:32.560 The medium salaries declined from one point six million in 0:14:33.000 --> 0:14:37.760 fifteen to one point one five million in one This 0:14:37.880 --> 0:14:41.000 was the economic This is the economic landscape that the 0:14:41.040 --> 0:14:44.120 players were contending with as they were negotiating this new 0:14:44.200 --> 0:14:48.600 labor agreement. Um, they did gain some concessions, but on 0:14:48.680 --> 0:14:51.920 the overall landscape, the owners held strong. You know, the 0:14:51.960 --> 0:14:54.520 economics of this been Let's just break it down a 0:14:54.560 --> 0:14:58.000 little bit, because there's there's the upper echelon of player 0:14:58.200 --> 0:15:01.080 who's doing great. No matter what you're in your out. 0:15:01.400 --> 0:15:04.480 Those marquee players are are getting bigger and bigger contracts, 0:15:04.560 --> 0:15:08.760 But what about the rest of it of the league? Right? Well, 0:15:08.800 --> 0:15:12.680 everybody sees the big contracts, right. Major League Baseball has 0:15:13.280 --> 0:15:17.840 ten players with guaranteed contract exceeding three hundred million dollars 0:15:17.840 --> 0:15:20.760 in value. Make no mistakes, these are some of the 0:15:20.920 --> 0:15:24.760 largest contracts for any athlete in the world. But the 0:15:24.840 --> 0:15:29.040 vast maturity of the player body is not doing so well. 0:15:29.200 --> 0:15:32.760 More than half the league operates on the minimum salary, 0:15:33.160 --> 0:15:37.360 which was five seventy thousands there about last year. That 0:15:37.480 --> 0:15:40.520 was the lowest among major sports. And teams are getting 0:15:40.560 --> 0:15:43.800 smarter and smarter. They know that it is beneficial to 0:15:43.840 --> 0:15:46.960 them to pay superstars more and where every year, but 0:15:47.120 --> 0:15:51.040 keep the majority of their teams to those minimum salary players. 0:15:51.440 --> 0:15:54.720 That helps to suggest why that media has fallen and 0:15:54.800 --> 0:15:58.400 also why the average salaries fallen as well. Okay, so 0:15:58.480 --> 0:16:02.520 let's talk about Bob rob Manfred h a central figure 0:16:02.680 --> 0:16:06.160 in this. The Commissioner of Baseball, a Harvard trained labor lawyer, 0:16:06.480 --> 0:16:09.680 served as the chiefs. The league's chief negotiated for several 0:16:09.680 --> 0:16:11.920 collective bargaining agreements going all the way back to two 0:16:11.920 --> 0:16:14.880 thousand two. Where does he come into all this? Right? 0:16:14.960 --> 0:16:17.240 A lot of people think that the commissioner is, you know, 0:16:17.320 --> 0:16:21.560 an impartial figure, right, operating for the best interest of 0:16:21.600 --> 0:16:24.000 the sport as a whole. That's not true in any 0:16:24.040 --> 0:16:27.960 professional sport. He works at the pleasure of the team owners. 0:16:28.040 --> 0:16:31.960 In baseball's case, the thirty team owners. That's really whose 0:16:32.000 --> 0:16:35.920 interests Rob Manfred was representing, and he's always represented them 0:16:36.320 --> 0:16:40.520 very well, and it's not a constituency with uniform interest. 0:16:40.880 --> 0:16:44.240 You have some owners like Steven Cohen of the Mets, 0:16:44.520 --> 0:16:46.920 who is the wealthiest owner in the league, and he 0:16:46.960 --> 0:16:48.880 wants to spend whatever he wants to spend. His tirole 0:16:48.960 --> 0:16:51.000 is gonna be two undred and fifty million dollars this year. 0:16:51.440 --> 0:16:53.000 You have a lot of owners that don't want to 0:16:53.000 --> 0:16:55.840 spend at all or as little as possible. One of 0:16:55.880 --> 0:16:59.440 the problems structurally in baseball is that spending on your 0:16:59.440 --> 0:17:02.040 team has been decoupled from profit. You can turn the 0:17:02.200 --> 0:17:05.479 very handsome profits uh not spending a lot and not 0:17:05.600 --> 0:17:08.120 winning at all. So you have four teams this year 0:17:08.320 --> 0:17:11.160 who are going to be spending about forty million dollars 0:17:11.480 --> 0:17:14.960 or less on salary. To do the math, you know 0:17:15.040 --> 0:17:17.400 that that's a fraction of what some of the higher 0:17:17.400 --> 0:17:20.480 spending teams are. These are the interest that Manfred had 0:17:20.520 --> 0:17:26.080 to represent these negotiating uh sessions, and clearly he satisfied 0:17:26.320 --> 0:17:29.520 all of them because the owners came away, in my opinion, 0:17:29.640 --> 0:17:32.840 very well. Then how did it go over with in 0:17:32.880 --> 0:17:37.040 the middle of negotiations, when Manfred was practicing his golf swing, 0:17:37.720 --> 0:17:40.359 How did that go over with players? Right? Well, this 0:17:40.440 --> 0:17:43.560 is a very tense negotiation. This is the second longest 0:17:43.640 --> 0:17:46.960 labor stoppage in the history of the league, second after 0:17:47.000 --> 0:17:52.720 only the horrible strike of Rob. Manfred was about to, 0:17:53.040 --> 0:17:55.720 you know, do something that is very serious. You know 0:17:55.720 --> 0:17:58.520 it's a lot of people, which is to actually cancel games. 0:17:58.600 --> 0:18:01.520 Like no matter how nasty negotiat Asian get, the cancelation 0:18:01.560 --> 0:18:03.919 of regular season games is kind of a bridge that 0:18:03.960 --> 0:18:08.960 nobody wants to cross. An Associated Press photographer captured him practicing, 0:18:09.080 --> 0:18:12.800 practicing his golf swing and the string taining stadium the 0:18:12.960 --> 0:18:15.960 day that he was going to cancel those games. Clearly, 0:18:16.119 --> 0:18:19.640 no matter how brought these things got, Rob Manfred remains 0:18:19.720 --> 0:18:24.040 in control and confidence, and he had every reason too, 0:18:24.119 --> 0:18:26.199 because the fact is, no matter how bad in the 0:18:26.200 --> 0:18:28.479 industry is the whole cancel games would have been for 0:18:28.520 --> 0:18:32.520 all parties. The players have much less capacity when push 0:18:32.600 --> 0:18:35.480 comes to show to withstand that and the potential lots 0:18:35.480 --> 0:18:38.480 of salaries than the far wealthier owners. All right, So 0:18:38.520 --> 0:18:40.879 what's the likelihood that anything changes in the near future, 0:18:40.880 --> 0:18:44.399 Because it's not like you know, sports contracts with media, 0:18:44.560 --> 0:18:48.000 I mean especially baseball, they're doing just fine. So there's 0:18:48.040 --> 0:18:50.040 still a lot of money coming into this, you know, 0:18:50.440 --> 0:18:53.040 sport if you will. So what's the likelhood anything changes 0:18:53.040 --> 0:18:56.760 for players more broadly? Well, you know this, this collective 0:18:56.760 --> 0:19:00.520 bargaining agreement tarrell last for five years, a long time. 0:19:00.600 --> 0:19:04.480 We're we have five years of labor peace quote unquote ahead. 0:19:04.720 --> 0:19:07.880 As Gene Orza, who is a long time players union 0:19:07.920 --> 0:19:12.480 official told me, collective bargaining produces incremental change, it doesn't 0:19:12.520 --> 0:19:16.880 produce a revolution. Did the players win some incremental change 0:19:16.880 --> 0:19:20.840 in this deal? Yes, especially for those minimum salary guys 0:19:20.920 --> 0:19:24.199 who really might never be millionaires, whose careers have no 0:19:24.280 --> 0:19:27.720 guarantees as far as their longevity, they will be better compensated. 0:19:27.760 --> 0:19:32.240 But as far as the big structural things that tilts 0:19:32.440 --> 0:19:35.880 toward the owner's advantage, no, that's not gonna change anytime soon. 0:19:36.080 --> 0:19:42.000 So who wins Opening day? Owners? You know, it seems 0:19:42.080 --> 0:19:45.680 like the owners always wins and they swart the negotiations. 0:19:46.160 --> 0:19:48.000 So yeah, I think we have to talk this one 0:19:48.040 --> 0:19:50.080 up to the owners. The players put up a very 0:19:50.080 --> 0:19:52.720 good fight. They didn't make some gains, but you know, 0:19:52.880 --> 0:19:54.760 it's another one for the owners, something we already know 0:19:54.840 --> 0:19:59.040 about the season. Yeah, I was gonna say, might not. Hey, 0:19:59.119 --> 0:20:01.040 Ben writer, it's a great read. Thank you so much, 0:20:01.040 --> 0:20:04.719 freelance contributor. Check out his book Astro Ball joining us 0:20:04.720 --> 0:20:05.879 on the phone in New York, and of course or 0:20:05.920 --> 0:20:07.879 thanks to Joe Webber. He's the editor of Bloomberg Business 0:20:07.880 --> 0:20:10.639 Week magazine. This story in the current issue. Find it 0:20:10.680 --> 0:20:12.960 on the Bloomberg and also at Bloomberg dot com. A 0:20:13.119 --> 0:20:15.200 really great read. Go pick up the issue now. Check 0:20:15.200 --> 0:20:17.119 it out at Bloomberg dot com and of course on 0:20:17.160 --> 0:20:19.800 the Bloomberg terminal. This is Bloomberg Radio and this is 0:20:19.840 --> 0:20:25.000 Business Week. Roy. How about you let me drive? Oh no, no, no, 0:20:25.240 --> 0:20:31.200 who's home? All right? Please? I'll do vels. I want 0:20:31.200 --> 0:20:39.119 to drive. It's a good question, good drive. This is 0:20:39.160 --> 0:20:45.479 the drive to the closed on Bloomberg Radio. All height 0:20:45.480 --> 0:20:48.680 folks were just about ten minutes away from the closing bell, 0:20:48.880 --> 0:20:51.320 and we have seen some buying, certainly in the last 0:20:51.320 --> 0:20:54.160 half hour hour of trading, so we are pretty much 0:20:54.160 --> 0:20:56.400 hovering near our best levels of this session. So let's 0:20:56.440 --> 0:20:58.840 get to it. Let's get to the drive to the 0:20:58.880 --> 0:21:00.879 clothes and with us right now. Back with us is 0:21:00.920 --> 0:21:03.760 Alan Zaffron, who's founding partner and co CEO at I 0:21:03.840 --> 0:21:05.960 e Q Capital. He's with us once again on the 0:21:05.960 --> 0:21:09.359 phone from Foster City, California. Hey, Alan, nice to have 0:21:09.480 --> 0:21:12.600 you back here on Bloomberg Radio. How are you and 0:21:12.840 --> 0:21:15.720 how do you think the markets are doing? Hey, Carol 0:21:15.800 --> 0:21:18.280 is doing great, Thank you? Do you? And Tim? How 0:21:18.359 --> 0:21:21.800 the markets doing. I think they're trying to reconcile all 0:21:21.840 --> 0:21:26.359 the risks inflation Ukraine. Uh. Not clear about what the 0:21:26.400 --> 0:21:28.879 inflation does to earnings growth rates going forward. But you 0:21:28.920 --> 0:21:32.439