Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Let's get to Lovely
Speaker 1: in studio now. We've been talking about UM having her on,
Speaker 1: and we're excited to get you on Lovely. And you're
Speaker 1: the CEO of BM Technologies. It's among the largest digital
Speaker 1: banking platforms in the US. I wonder how much can
Speaker 1: be done, And I was thinking about this when coin
Speaker 1: Base went public, or at least had their had their
Speaker 1: direct listing last week. It'd be great if I could
Speaker 1: have my bank accounts somewhere, trade things like you know,
Speaker 1: digital currencies, stocks and bonds, and also somehow input my
Speaker 1: employment details so that my tack UH filings would be automatic.
Speaker 1: Can Can something like that ever happened with with an
Speaker 1: online with a digital banking platform? Yes? Absolutely, thanks so
Speaker 1: much for having me Um. I think a couple of
Speaker 1: years ago we saw a lot of exuberance and excitement
Speaker 1: about fintech. Spintech, we're really coming in and saying, hey,
Speaker 1: banking your your old school, you're not doing this in
Speaker 1: a consumer friendly way. We can come and, uh, really
Speaker 1: disrupt what's happening and provide a way better customer experience.
Speaker 1: And many um you know players came in, did that
Speaker 1: robin Hood coin based, you know, so Fi, chime et cetera,
Speaker 1: b M Technologies, etcetera. But what a lot of them
Speaker 1: started doing was really unbundling financial services where it was
Speaker 1: one product at a time. Someone's gonna do personal loans
Speaker 1: better than what exists today. Someone's gonna do you know,
Speaker 1: investing better than what exists today. Someone's gonna do banking
Speaker 1: better than what exists today. But it was all separate
Speaker 1: rather than you know, really creating a fulls of a
Speaker 1: digital banking platform. And what is now happening is the
Speaker 1: realization that we can create a technology platform where all
Speaker 1: of this is weep together. Maybe that institution doesn't even
Speaker 1: have to provide all of those services. They can plug
Speaker 1: in through a PI. Is the best in breeds from investing,
Speaker 1: from crypto trading, from banking for advice, um, and that
Speaker 1: is what we're seeing and that can absolutely happen. I'd
Speaker 1: love to get your thoughts, lovely in a kind of
Speaker 1: about how your business has been impacted, how it has
Speaker 1: changed over the past fourteen months with this pandemic. You know,
Speaker 1: we're hearing the obviously lots of stories that people are
Speaker 1: doing more and more of their banking digitally. How has
Speaker 1: it impacted your business? Absolutely? I think in general, the
Speaker 1: pandemic force and acceleration of digitization, the use of technology
Speaker 1: forcing all segments, all generations to begin using technology for
Speaker 1: all sorts of things, grocery and e commerce, uh and
Speaker 1: banking being one of them. And so as it relates
Speaker 1: to our business, we did see exponential growth last year
Speaker 1: in our new business lines. We saw si plus growth
Speaker 1: and deposits, we saw two plus growth and spend over
Speaker 1: the year, and so overall we saw a lot of
Speaker 1: consumers logging into their app, a lot more, using a
Speaker 1: lot of the features, the functionalities, the saving and budgeting tools,
Speaker 1: and obviously increased usage spend balances across the board. Does
Speaker 1: it matter what, um what platform people use or I
Speaker 1: mean like iOS versus Android, Are you agnostic or do
Speaker 1: you head for that? Absolutely agnostic? We have to move towards.
Speaker 1: You know, if if people want to have a truly
Speaker 1: better banking experience, you can't create barriers like that. And
Speaker 1: so not only iOS, Android, but really across different channels,
Speaker 1: whether that's your phone, whether that's you know, online mobile,
Speaker 1: whether that's being able to access through Alexa. You know,
Speaker 1: we're coming into a world where we use and access
Speaker 1: many different devices, and we should be able to do
Speaker 1: banking and everything else that's important to us through various
Speaker 1: different channels and devices. And I think that's the direction
Speaker 1: people are heading. And so as b M Technologies, BM
Speaker 1: Technologies lovely and love to get a sense of kind
Speaker 1: of where what's the kind of environment for your company
Speaker 1: and where do you see growth going forward? Yeah, so,
Speaker 1: as you had mentioned in the beginning, we are one
Speaker 1: of the largest digital banking platforms in the country today
Speaker 1: and we have over two million account holders and and
Speaker 1: we're growing quite rapidly. We did go public earlier this
Speaker 1: year through his fact vehicle where our tickers b M,
Speaker 1: t x UM and you know, for for us, it's
Speaker 1: it's really about how do you continue to expand the
Speaker 1: digital banking experience in the most profitable, high growth way
Speaker 1: while still addressing customer pain points, and so a lot
Speaker 1: of players out there are taking a director consumer approach.
Speaker 1: Bank Mobile is actually taking a bat data the approach
Speaker 1: and something called banking as a service. Our belief is
Speaker 1: that every single customer in this world, really, you know,
Speaker 1: would benefit from having access to financial services, and that
Speaker 1: banks shouldn't be the only one to have the ability
Speaker 1: to offer this service. You know, every business, every employer,
Speaker 1: every government entity should be able to offer banking. And
Speaker 1: that is where you get into the strategy of banking
Speaker 1: as a service. And that is uh the vertical that
Speaker 1: that we are most invested in creating and helping non
Speaker 1: banks get into the banking business with fully branded banking
Speaker 1: services to be able to create more loyalty, more engagement
Speaker 1: with their customers and with their employees. Lovely and thank
Speaker 1: you so much for joining us. They really appreciate that.
Speaker 1: A really interesting story, a growth story here on the
Speaker 1: consumer banking front as digital plays a bigger and bigger
Speaker 1: role in consumer banking. Lovely and sid Do chair CEO
Speaker 1: and founder of BM Technologies. Kind of a fascinating story there.
Speaker 1: I know, just speaking for myself, I'm doing much more
Speaker 1: of my day to day consumer banking on the digital
Speaker 1: platform that I did prior to the pandemic, and I
Speaker 1: think we're hearing from a lot of financial institutions that
Speaker 1: consumers across the border having a similar experience. So lots
Speaker 1: of opportunity for technological innovation. Matt let's switch gears talk
Speaker 1: about the fixed income markets. No better person to do
Speaker 1: that with than r J. Gallows, senior portfolio manager for
Speaker 1: fixed income is also ahead of the missile bond group
Speaker 1: at Federated Hermes. R J. Thanks so much for joining
Speaker 1: us once again. Here I'm looking at the ten year
Speaker 1: uh one point five eight percent. It doesn't scream inflation
Speaker 1: to me. Give us your thoughts here on the fixed
Speaker 1: income market and maybe some concerns creeping in about inflation. Yeah, well,
Speaker 1: good morning, thanks for having me back. Um. You know,
Speaker 1: if you just look at an interday charge, it wasn't
Speaker 1: all that terribly long ago, and the tenure peaked out
Speaker 1: on March thirtieth, I think it was or one around
Speaker 1: one seventy seven, so you know we've traced give a
Speaker 1: take twenty basis points since then. Um, at the time,
Speaker 1: the market was very focused on the reflation trade, let's
Speaker 1: call it, maybe even the inflation trade um and I
Speaker 1: think we still believe that that we're going to have
Speaker 1: a massive rate of growth as we come off the
Speaker 1: you know, difficulty economic period related to COVID that we've
Speaker 1: been through. And we do feel inflation is biased upwards.
Speaker 1: We've seen it in the year of a year numbers.
Speaker 1: I just think the market might have gotten a little
Speaker 1: ahead of itself. Maybe at the end of March. If
Speaker 1: you look on a year to day basis, you know
Speaker 1: that the ten year real yield is up about thirty
Speaker 1: basis point thirty two basis points call it, and then
Speaker 1: the break even on top of that is of about
Speaker 1: thirty six. So on the air real yields are up,
Speaker 1: they're still negatives very low. Probably we'll go up further,
Speaker 1: and inflation break evens are well north of two percent,
Speaker 1: which the ft has to like. We think that the
Speaker 1: retraceman yields we've seen so far is some of the
Speaker 1: fear came out of the market, but the trajectory is
Speaker 1: still upwards, and nominal yields, real yields break evens maybe
Speaker 1: a little less so because inflation is starting to perk up,
Speaker 1: than these break evens are pricing in well north of two.
Speaker 1: So we don't think that this most recent trade is
Speaker 1: time to get long bonds. We still like short. And
Speaker 1: on inflation, I mean, you see huge growth coming up,
Speaker 1: do we have huge inflation? And does it stick? I me,
Speaker 1: it's it's it's the key question. I think that everyone
Speaker 1: understands base effect. You know, the price level doesn't fall
Speaker 1: all that much in American history what it did last springs,
Speaker 1: the COVID shock set in so as we laugh that
Speaker 1: by twelve months the year of year numbers are high.
Speaker 1: But does it stick? And that's the key question. And
Speaker 1: everybody's debating. And I would say internally at our at
Speaker 1: our shop at Federated Herme's, we believe that the inflation
Speaker 1: trajectory is upwards. Now there's some people and I would
Speaker 1: say it's almost like a demographic difference. People who were
Speaker 1: in this business in the seventies and eighties, Uh, you know,
Speaker 1: they feel like we need another Paul volcra I mean,
Speaker 1: they're they're they're much more concerned the inflation is not
Speaker 1: only gonna stick, but accelerate. People who've been in this business,
Speaker 1: you know, called from the mid nineties on, you know,
Speaker 1: seem to be like, I'm not so worried, and then
Speaker 1: the younger people didn't worry about aation at all because
Speaker 1: they've never really seen it. Um Our view is is
Speaker 1: sort of in the middle. I think that inflation is
Speaker 1: going to have a tail wind. I don't think it's
Speaker 1: going to become unhinged. I don't think we're talking about three,
Speaker 1: four and five percent rates of inflation by any means.
Speaker 1: But I do think the Fed will have some success,
Speaker 1: some satisfaction after decades of being disappointed by inflation exceeding
Speaker 1: two percent. Their framework opens the door for them to
Speaker 1: react as opposed to be preemptive. That's a massive difference
Speaker 1: from Paul Bulker and the decades that followed him. All Right, So,
Speaker 1: if we're going to have inflation on any meaningful scale
Speaker 1: r J, presumably it has to come from wage inflation
Speaker 1: as opposed to some of the other commodities that we're
Speaker 1: going to see a base effect over the next couple
Speaker 1: of quarters and some of the reported numbers. So do
Speaker 1: you foresee presumably higher wage inflation in this economy of
Speaker 1: the next twelve eighty months. Well, I think that workers
Speaker 1: are going to be incentimized to come back in into
Speaker 1: the workplace, and some of that is going to involve
Speaker 1: enticing them with higher rates of pay. You know that
Speaker 1: translates to allery and wage increases, especially in the areas
Speaker 1: that were the most severely COVID effect of like travel
Speaker 1: and hospitality, etcetera. UM. I think over time, yeah, you
Speaker 1: will be seeing some higher rates of nominal pay increase. UM. Again,
Speaker 1: I'm not in the camp that it becomes an unhinged problem.
Speaker 1: I believe. I actually believe the FED when they say
Speaker 1: we know what to do if inflation gets too high,
Speaker 1: I think we all know what to do. They would tighten,
Speaker 1: and they would tighten in fifty to seventy five bases
Speaker 1: point increment, something that hasn't been done in like forever.
Speaker 1: And I think if they did, what do you think
Speaker 1: financial conditions would do? They would roll over. People would
Speaker 1: be very nervous if the FED suddenly was spiking real
Speaker 1: rates to Dallas inflation, and that's the tool they know works.
Speaker 1: There has been an asymmetry in the Fed's toolkit. They
Speaker 1: can't seem to get inflation up. They know how to
Speaker 1: douase it, so they change their framework class August to
Speaker 1: becoming reactive let the inflation show up. It's called the
Speaker 1: bunker hill, you know, don't tighten city, see the whites
Speaker 1: of inflations eyes. That's the new new approach, very different
Speaker 1: than the re emptive forward looking uh tightenings that we
Speaker 1: saw in the past. Well and even then, don't tighten right.
Speaker 1: The idea is that inflation is just gonna run right
Speaker 1: by you and be gone. Yeah, I mean I think not.
Speaker 1: So their framework is what they want inflation to rise
Speaker 1: above two. They wanted to have signs that it's going
Speaker 1: to stay above two before they tightened. So what if
Speaker 1: it goes above two and it hits two and a half,
Speaker 1: and I think one can infer the two and a
Speaker 1: half would be fine from the FED standpoint. If it
Speaker 1: just stays there for a month or two it starts
Speaker 1: to roll back over then yeah, and then you do
Speaker 1: have a problem. Their framework doesn't produce the tightening that
Speaker 1: they want. Um. That's why I think they're in a
Speaker 1: sense pouring some men around their feet and say no,
Speaker 1: we're standing here and we want you the market to
Speaker 1: believe inflation goes up. Because inflation is a little bit
Speaker 1: of a game theory concept. Right. If if price setters,
Speaker 1: those who charge prices for goods and services believe inflation
Speaker 1: is rising, they put it into their pricing decisions and
Speaker 1: it becomes self fulfilling. So if the Fed can allow
Speaker 1: that to happen without becoming you know, boiling over and
Speaker 1: too hot, then you get the inflation you want and
Speaker 1: you hopefully don't have a boiling over economy. If you
Speaker 1: do have the boiling over economy on the inflation front,
Speaker 1: the FED knows what to do. So, I mean people
Speaker 1: might criticize me. I used to work there a long
Speaker 1: time ago, the New York. I think it's gonna work right.
Speaker 1: It's gonna take time, and rates are heading up in
Speaker 1: the meantime. All right, r J, thanks so much for
Speaker 1: joining us. As always, we appreciate your thoughts and input.
Speaker 1: R J. Gallows, Senior portfolio manager Fixed Income, is also
Speaker 1: ahead of the amunicipal bond group at Federated HERM. He's
Speaker 1: giving us his thoughts on the credit markets and on inflation.
Speaker 1: Not too concerned here in the near term, Matt, let's
Speaker 1: talk about semiconductors here. If there's definitely been an issue
Speaker 1: with supply of these chips on a global scale, and
Speaker 1: that's happening ripple effects across the global economy, I'm talking
Speaker 1: about you know, just take global autos for example, a
Speaker 1: lot of the manufacturers saying that they can't meet the
Speaker 1: production goals because there aren't enough chips. Let's get the
Speaker 1: latest on what this means and how this might play out.
Speaker 1: We do that with Rory Green, China, economists at T. S.
Speaker 1: Lombard based in Soul South Rio. Rory, thanks so much
Speaker 1: for joining us here. Give us a sense of what's
Speaker 1: going on in the semiconductor market right now. What's the
Speaker 1: state of the market. Yea, COVID nineteen has really brought
Speaker 1: forward an acceleration in a structural demand shift. So it's
Speaker 1: not just autos, We're talking about demands for consumer products,
Speaker 1: data centers, um, whole range of different academies of demand
Speaker 1: really spiking off of COVID nineteen and likely to stay
Speaker 1: high for you know, a few years now. This is
Speaker 1: a structural shift we're looking at, which were in the
Speaker 1: very early early days on How do you expect it
Speaker 1: to hit GDP growth? I mean mostly I think of
Speaker 1: the US and Europe, but I guess you're you're thinking
Speaker 1: about it more globally obviously, Yeah, that that's right, I
Speaker 1: think mainly, and the main hit is going to be
Speaker 1: it's a quarterly hit rather than a moment rather than
Speaker 1: a hit to annual growth rates. So it will be
Speaker 1: a q on hit for the big auto producing nations
Speaker 1: from Germany, Mexico, slight slide drag in China, but over
Speaker 1: the course of the year, it's still expecting that these
Speaker 1: um the production lost in Guan will be made up
Speaker 1: throughout the subsequent subsequent quarters. So it's rory. You know,
Speaker 1: I'm here. I'm here in Berlin, so I mean we
Speaker 1: produce a ton of cars and motorcycles in this country obviously,
Speaker 1: and throughout Europe there big plants, and in the US,
Speaker 1: I know where all the plants are. I don't know
Speaker 1: much about the production in China except that you know,
Speaker 1: Elon Musk is making Tesla's there and everybody wants to
Speaker 1: have everybody's got a joint venture there. How much auto
Speaker 1: manufacturing is there actually in the world's second biggest economy. Yeah,
Speaker 1: it's it's a big manufacturing, big chunk of the economy.
Speaker 1: And they say everyone's got a joint venture there, and
Speaker 1: then you've got a huge, huge chunk which is just
Speaker 1: purely for the domestic domestic market as well. So it's
Speaker 1: it's a lot a lot of cars being made um
Speaker 1: and a big employer as well, so the intent of
Speaker 1: the labor intensity is very high. So it compared to
Speaker 1: Germany where it's all automated, in China it's still a
Speaker 1: big employer, So it's it's a very important sector in China.
Speaker 1: Or as we think about the global you know, the
Speaker 1: chip market, it's I guess what we've learned maybe starting
Speaker 1: with President Trump and some of the teriffs and then
Speaker 1: with the pandemic, is that you know a lot of
Speaker 1: countries are thinking about reassuring some of their chip manufacturing capabilities.
Speaker 1: Do you expect that to be a real trend? Or
Speaker 1: we go to see more semiconductor manufacturing sites, say on
Speaker 1: continental Europe, in North America, certainly in North America, and
Speaker 1: Europe's plan is still a bit lacking because what we're
Speaker 1: talking about here is it needs a lot of political
Speaker 1: and financial capsule to be invested to get it's a
Speaker 1: reassuring process underway. Recording talking about ten twenty billion dollars
Speaker 1: to build just one fabricane one semi conductor fab So
Speaker 1: it needs a lot of investment, and Biden, I think,
Speaker 1: is putting this in place. Intel has made a very
Speaker 1: big effort, made a large bid to become the West,
Speaker 1: not just the US, the West geo politically secure manufacture,
Speaker 1: and he's decided to make investments accordingly. So I think
Speaker 1: we are going to see this trend increasing going ahead.
Speaker 1: But Europe still seems a bit called. Whether they really
Speaker 1: are going to stump up enough money to to get
Speaker 1: some some more fabs there, Who's going to be hard
Speaker 1: to see. I don't know how to compare the announcements,
Speaker 1: but the Intel announcement you mentioned seemed big at twenty
Speaker 1: billion until I heard Taiwan Semiconductor say they want to
Speaker 1: invest a hundred billion. Is that just spin or is
Speaker 1: that legitimate investment in that size? That's as a legitimate
Speaker 1: investment um that over the next couple of years, so
Speaker 1: probably learning about twenty five to thirty billion a year
Speaker 1: in CAPEX. So it's a large investment and very positive
Speaker 1: signs for the industry at the whole. And this is
Speaker 1: the reason that t SMC and Samsung to a lesser
Speaker 1: extent or ahead of the intail it consistently just pumping
Speaker 1: money into both capacity and R and D, and that's
Speaker 1: what's enabled them to build leading edge that they have
Speaker 1: now ahead of the intail and the rest of the
Speaker 1: world in chip production. Alright, just real quick for thirty seconds,
Speaker 1: is Taiwana career? Are they still the leaders in global
Speaker 1: chip manufacturing? Yes, they are still the leaders and I
Speaker 1: think likely to stay that way for the next step.
Speaker 1: All right, very interesting stuff indeed, and that um, that
Speaker 1: investment really does put the size of US and European
Speaker 1: investment to shame. And maybe Biden will turn that around.
Speaker 1: Roy Rory points out he's behind a big part of
Speaker 1: the reassuring. I don't know who would be behind it
Speaker 1: here though, Paul, because the EU can't even agree on, like,
Speaker 1: you know, buying vaccines. Yeah, so exactly. I don't know
Speaker 1: how that works on over there on your scale there,
Speaker 1: matt Um, you know, and it kind of just makes
Speaker 1: the Brexit folks, uh, I guess feel a little bit
Speaker 1: smarter indicated. Yeah, absolutely, It's got to be done really
Speaker 1: on a national level here, I think is the lesson
Speaker 1: being learned in any case, Rory Green great to spend
Speaker 1: some time with him. China economist at TS Lombard staying
Speaker 1: up late in Seoul where it is what eleven thirty
Speaker 1: at night. This is Bloomberg One of the key stories
Speaker 1: of today is around global soccer, and a group of
Speaker 1: the world's richest soccer clubs, including Manchester United and Real Madrid,
Speaker 1: announced plans for a European breakaway league starting in August.
Speaker 1: And that's got people all up an arms, not just
Speaker 1: in Europe but around the world, as it is a
Speaker 1: global sport. Let's get the latest. We would do that
Speaker 1: with David Hellier, Bloomberg Reporter, David, I don't have a
Speaker 1: dog in this fight here. I'm not a huge fan
Speaker 1: of European soccer. I follow it, but I'm not passionate
Speaker 1: like so many people are. To me, this just looks
Speaker 1: like a money grab. Talk to us about what's going
Speaker 1: on here. Yeah, I mean, I'd agree with you it
Speaker 1: is a money grab. It's um. But there's lots of
Speaker 1: different layers to um. Businesses do because they wanted they
Speaker 1: want to make money. Yeah, you've got a group of owners,
Speaker 1: three of whom are American Arsenal Liverpool and Memphister United. UM.
Speaker 1: And you could argue a sen Land is Elliott, the
Speaker 1: Hedge Fund UM and uh they for a long time,
Speaker 1: the owners in Europe have been thinking about, you know,
Speaker 1: how do they how do they play more often amongst
Speaker 1: the bigger clubs. Um. They get a bit frustrated when
Speaker 1: they have to go to play in Denmark or you know,
Speaker 1: uh in Croatia, Uh, some club that they've probably never
Speaker 1: heard of. Um. And they think that for an international
Speaker 1: audience would be much more attractive if they could always
Speaker 1: play against the top clubs. And so they put this
Speaker 1: thing together. They've been doing it behind the scenes for
Speaker 1: for a while now. I mean we've been reporting about
Speaker 1: it since about a year ago, UM, and they finally
Speaker 1: come out of me open. And so they've got twelve
Speaker 1: teams to twelves, you know, absolutely top teams in Europe
Speaker 1: to sign up to it. But it is horrified everybody, Politicians, fans, uh,
Speaker 1: you know, leagues, everybody. UM. You know some of the
Speaker 1: I haven't I haven't seen such an extreme reaction. Uh.
Speaker 1: You know all the years I've been reporting on soccer,
Speaker 1: shouldn't we I mean I tend to have initial reactions
Speaker 1: to things that are maybe conservative and based in my
Speaker 1: free market upbringing. Often I'm wrong when I look back
Speaker 1: at my initial opinion. But my first take, um, David,
Speaker 1: is that let the market decide. Why do we have
Speaker 1: all these politicians jumping in. You know, if people don't
Speaker 1: want to watch a Super League, Um, then they won't write,
Speaker 1: and then the business venture will fail and the Champions
Speaker 1: League will continue. Everything that they that they want is
Speaker 1: going to be there, and the stuff they don't want
Speaker 1: they just don't tune into. Yeah, I mean, you know
Speaker 1: that's a it's a very good point, um, I think.
Speaker 1: I mean, you know, the politicians are jumping in. You've
Speaker 1: got Boris Johnson, who's who's a conservative politician. Uh, he's
Speaker 1: jumping in because he knows that a lot of his constituency,
Speaker 1: a lot of fans up in arms, and you know,
Speaker 1: just he's doing it for his own purposes. I think
Speaker 1: he probably believes exactly what you just said. Um, so
Speaker 1: I don't think he's been truth to his his word. Really, um,
Speaker 1: why not let it just go? I suppose, um for me? Anyway,
Speaker 1: the bit I haven't really explained is that what they're
Speaker 1: doing is so alien to the competitive element in sport
Speaker 1: in in Europe. Is trying to set up a league
Speaker 1: which has fifteen permanent members who can never get relegated
Speaker 1: and never come out of the league no matter how
Speaker 1: badly they do. Concept that Yeah, Yeah, exactly it works
Speaker 1: in the NFL because that's always been the case. I think.
Speaker 1: I think it's like, I don't know, maybe we're deluded,
Speaker 1: but we we believe quite passionately in this history of
Speaker 1: soccer and hundred years or you know, have as longer
Speaker 1: than a hundred years now, Um, you know, I don't know.
Speaker 1: We just have an attachment in Europe, I think to
Speaker 1: the the concept of promotion and relegation, and so because
Speaker 1: we believe so firmly in that, allowing this simply to
Speaker 1: go ahead actually alters the whole pyramid. I think that's
Speaker 1: that's the problem. And if it was just the cases
Speaker 1: let them go ahead, I mean, but you know, there's
Speaker 1: a good I think you're right in a way. I mean,
Speaker 1: you know, why not let them And some people even
Speaker 1: who hate hate the concert for saying just let them go,
Speaker 1: let them go. They'll fail and then they want to
Speaker 1: come crawling back and we'll tell them know, um, you know.
Speaker 1: So it's it's kind of um, but I mean basically,
Speaker 1: it's it's just aroused a lot of emotion, really, and
Speaker 1: it's very interesting. I think the the fact that a
Speaker 1: lot of it is becoming focused on the American investors. UM.
Speaker 1: So it's JP Morgan Bank who are financing it, um
Speaker 1: As I said, it's Liverpool, Man United, Arsenal, all owned
Speaker 1: by Americans. There's been an incredible invasion of US money
Speaker 1: into European football or soccer um and I think that's
Speaker 1: because the franchise values in America are just so huge,
Speaker 1: so enormous, and it's very hard to get a hold
Speaker 1: of franchises. And they've seen that European soccer clubs are
Speaker 1: changing hands quite readily, so they've they've all come in here.
Speaker 1: But it's this how this might play out. Is this
Speaker 1: just a bargaining chip for other negotiations or can this happen?
Speaker 1: Well yeah, no absolutely. I mean so that the current
Speaker 1: league organizing u A, for the current organizing of the
Speaker 1: Champions League, they've got their own plans to extend their competition,
Speaker 1: have more matches, potentially get more money um to fatisfy
Speaker 1: the clubs in in that way. But I'm not sure
Speaker 1: that maybe they've left it too late because these guys
Speaker 1: have already signed. So it depends on that. You know,
Speaker 1: we're being told they've signed finding agreements they can't come
Speaker 1: out of it. But you know that if if there's
Speaker 1: a good enough deal being offered on the other side
Speaker 1: of the street that they you know, they might look there.
Speaker 1: I just look at, you know, Formula one as a
Speaker 1: model for how badly this could turn out, because it's similarly,
Speaker 1: all big money, it's all encased now in one big
Speaker 1: league that it's just dreadfully boring. Yesterday's're Racing the Malo
Speaker 1: was okay, but it's nobody wants to watch anymore the
Speaker 1: way they used to. And that could be where these
Speaker 1: guys are headed. Yeah, I mean it could very well be.
Speaker 1: And you know that, I mean that would be an
Speaker 1: amazing uh you know, punt taken by JP Morgan, who's
Speaker 1: who was sort of they've got four billion at risk here? Um,
Speaker 1: but who's your team, David, who who do you support?
Speaker 1: My team? My team is owned by a Russian oligarcus Chelsea,
Speaker 1: So there. I mean, I I thought I didn't expect
Speaker 1: them to go into it. The the you know, the
Speaker 1: signals were that they wouldn't necessarily go into it, But
Speaker 1: I think they're they're they're in it not because they
Speaker 1: need the money, obviously, but because of the fear of
Speaker 1: missing out. Absolutely the Pomo there David Hellier, Thanks so
Speaker 1: much recovering this for us. Is a Bloomberg reporter on
Speaker 1: this European soccer story or football as they call it here,
Speaker 1: and it is playing out massively across the continent. Thanks
Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
Speaker 1: and listen to interviews with Apple Podcasts or whatever podcast
Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
Speaker 1: Matt Miller three and on Fall Sweeney I'm on Twitter
Speaker 1: at pt Sweeney. Before the podcast, you can always catch
Speaker 1: us worldwide at Bloomberg Radio.