WEBVTT - H&R Block CEO Supports IRS Funding 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carole Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanivk. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics, economics, all partnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.599 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.239 download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com. 0:00:23.400 --> 0:00:25.120 You can also listen to our radio show at two 0:00:25.160 --> 0:00:27.840 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.880 --> 0:00:31.960 YouTube search Bloomberg Global News. We've been watching shares of 0:00:32.120 --> 0:00:34.200 H and R Block hitting a record high, the stock 0:00:34.280 --> 0:00:37.199 nearly doubling this year alone. This is the company reported 0:00:37.360 --> 0:00:41.040 fourth quarter just ADPs that beat revenue was flat, raised 0:00:41.040 --> 0:00:44.319 guide and so for fisical adjusted EPs, and it did 0:00:44.360 --> 0:00:48.360 approve a new buyback of one billion dollars. Really great 0:00:48.360 --> 0:00:50.840 to have back on Bloomberg Business Week once again. Jeff Jones. 0:00:50.840 --> 0:00:52.720 He is president and CEO at H and R Block. 0:00:52.880 --> 0:00:54.760 We'd like to remind everybody that Jeff has had a 0:00:54.760 --> 0:00:59.000 really cool career um including Chief Marketing Officer at Gap Target, 0:00:59.120 --> 0:01:02.560 President of Rideshew her at Uber so really in tune 0:01:02.560 --> 0:01:04.360 with what's going on in terms of the corporate world. 0:01:04.400 --> 0:01:07.400 Jeff joins us via zoom from Kansas City, Missouri. Jeff's 0:01:07.440 --> 0:01:10.119 so nice to have you here. How are you? I'm 0:01:10.160 --> 0:01:12.680 doing great, Carol, good afternoon, and hey Mike, how are 0:01:12.680 --> 0:01:14.520 you guys? Hi? Jeff, Yeah, I had to do. I 0:01:14.560 --> 0:01:16.559 did a double take looking at your stock chart today. 0:01:16.560 --> 0:01:18.319 I was like, Jeff's gotta be the one guy. We've 0:01:18.319 --> 0:01:20.360 been talking about this bear market all year. Jeff's gotta 0:01:20.360 --> 0:01:23.679 be like, are you talking about you know what? It's 0:01:23.720 --> 0:01:27.440 It's really amazing to see the market starting to hear 0:01:27.440 --> 0:01:30.240 our story. And you comment on a Carol, we had 0:01:30.240 --> 0:01:34.160 a great year. Um, we also provided really strong outlook 0:01:34.200 --> 0:01:37.360 and so I think it's a really great combination for 0:01:37.400 --> 0:01:39.720 the company right now. Well, and you have been you know, 0:01:39.760 --> 0:01:41.960 you've had a five year plan. You've been really you know, 0:01:42.080 --> 0:01:46.440 working on small business financial products. A lot of different things. 0:01:46.680 --> 0:01:48.800 Tell us about the quarter in the look ahead. What's 0:01:48.840 --> 0:01:52.400 really driving momentum right now? Jeff, Well, let's start with 0:01:52.560 --> 0:01:56.680 you know, our bread and butter, the core consumer tax business. Um, 0:01:56.720 --> 0:02:00.600 you know, we continue to make improvements in avenue and 0:02:00.760 --> 0:02:05.240 client volume, in market share, and our assistant business really 0:02:05.280 --> 0:02:09.600 demonstrating just how strong that industry is. You know, we 0:02:09.600 --> 0:02:13.079 we talked about going into the pandemic and nineteen coming 0:02:13.080 --> 0:02:17.240 out in twenty two, up in revenue, up in market share, 0:02:17.480 --> 0:02:22.600 up and earnings reducing shares outstanding. So the core consumer 0:02:22.600 --> 0:02:26.400 tax business has been very strong. We had a record 0:02:26.520 --> 0:02:29.679 year in small business UH, and so that means more 0:02:29.760 --> 0:02:33.520 and more small business owners are recognizing our expertise and 0:02:33.600 --> 0:02:36.400 turning us for tax. And then we had a really 0:02:36.400 --> 0:02:39.560 successful initial launch of Spruce, which is our new challenger bank. 0:02:40.120 --> 0:02:42.760 You know, Cheff, the big news in politics this week 0:02:42.760 --> 0:02:46.440 obviously is that Inflation Reduction Act UH. And part of 0:02:46.440 --> 0:02:50.320 that is, UH they want to add UH. I forget 0:02:50.320 --> 0:02:54.200 how many thousands, thousands and thousands of IRS agents. I've 0:02:54.240 --> 0:02:58.720 got to think that's a very big opportunity opportunity for you, 0:02:58.800 --> 0:03:02.040 but also potentially at challenge. I'm just curious how you're 0:03:02.080 --> 0:03:05.240 thinking about the ramp up of the I r S 0:03:05.400 --> 0:03:09.799 enforcement that is embedded in this bill. Well, we've been 0:03:09.919 --> 0:03:12.880 very vocal in support of the I r S receiving 0:03:12.919 --> 0:03:16.400 more funding. UM, you know, they touch more American consumers 0:03:16.400 --> 0:03:19.160 than any other agency, and they have not had the 0:03:19.240 --> 0:03:21.919 resources to be equipped to do that. So we absolutely 0:03:21.919 --> 0:03:25.600 support that. And what we've seen, I guess over history 0:03:25.680 --> 0:03:28.880 is when the I r S steps up enforcement, the 0:03:29.000 --> 0:03:32.799 consumer looks for expertise more and more. You know, keep 0:03:32.840 --> 0:03:36.480 in mind, the stakes for our clients are very high. 0:03:36.480 --> 0:03:39.680 Getting this right matters, getting me every dollar they deserve 0:03:39.760 --> 0:03:42.960 matters whether you're a small business owner, a gig worker, 0:03:43.080 --> 0:03:46.119 or a consumer. And so you know, we're glad they're 0:03:46.160 --> 0:03:49.600 getting more support and we're here to help the customer. 0:03:50.000 --> 0:03:51.600 You know, you did talk jet that you know your 0:03:51.600 --> 0:03:54.280 core businesses the tax services, but you are expanding in 0:03:54.320 --> 0:03:57.240 small business. You mentioned spruce your mobile banking. What kind 0:03:57.240 --> 0:03:59.040 of growth are we seeing on those platforms and do 0:03:59.080 --> 0:04:02.400 you anticipate that there is a time where they are 0:04:02.440 --> 0:04:06.240 as equally as important as your core tax business. Well, 0:04:06.280 --> 0:04:09.840 there's no question there strategically as important today. Of course 0:04:09.960 --> 0:04:13.000 they're earlier stage. We've been in the tax business for decades. 0:04:13.680 --> 0:04:17.239 In small business, we had a record gear we grew 0:04:17.360 --> 0:04:20.560 that business clients five percent on top of four percent 0:04:20.680 --> 0:04:24.159 last year. Uh, and believe there's still lots of upside 0:04:24.279 --> 0:04:28.360 in serving small businesses just looking at the landscape. You know, 0:04:28.800 --> 0:04:32.400 those people that have side hustles, ten ninety nine gig workers. 0:04:32.760 --> 0:04:35.800 They may not consider themselves to be a small business owner, 0:04:36.279 --> 0:04:41.200 but they absolutely have tax and bookkeeping potentially payroll needs, uh, 0:04:41.360 --> 0:04:45.679 just like a small business would. And then we with Spruce, 0:04:45.720 --> 0:04:49.000 we had a fantastic launch. That product has been in 0:04:49.040 --> 0:04:52.160 the market only a handful of months. We've had seven 0:04:52.200 --> 0:04:55.960 major releases of the app since we launched, and right 0:04:56.000 --> 0:04:59.880 now the team is focused on testing customer acquisition our 0:05:00.000 --> 0:05:03.880 outside of tax season and then getting ready to launch 0:05:03.920 --> 0:05:07.200 it in our retail channel next tax season. Obviously, we 0:05:07.240 --> 0:05:10.159 have a very large install base of customers and we 0:05:10.240 --> 0:05:13.520 want to take full advantage of introducing them to Spruce 0:05:13.560 --> 0:05:15.960 next year. Jeff, what was cool about talking to you? 0:05:15.720 --> 0:05:18.359 You talk about small business? You know, it's funny. Our 0:05:18.920 --> 0:05:22.640 colleague on television, Caroline Hyde, she talked about the small 0:05:22.720 --> 0:05:25.880 cap um the Russell doing really well and out performing 0:05:25.880 --> 0:05:27.839 the broader market, and a lot of that has to 0:05:27.839 --> 0:05:30.040 play with kind of domestic businesses here in the US 0:05:30.120 --> 0:05:32.880 maybe upbeat about the outlook in the economy. So I 0:05:32.920 --> 0:05:35.240 love hearing what you have to say about small business. 0:05:35.240 --> 0:05:37.680 I love hearing about Spruce because you get some inside 0:05:38.160 --> 0:05:41.039 into consumers and really kind of maybe how much money 0:05:41.040 --> 0:05:42.920 they've been able to save and so on and so forth. 0:05:43.240 --> 0:05:46.279 Based on what you are seeing based on your business overall, 0:05:46.640 --> 0:05:49.200 would you say, yep, we are headed for a recession 0:05:49.200 --> 0:05:52.640 in the next year, or we're not. If I just 0:05:52.720 --> 0:05:55.240 had to simply call it, I would say we're not 0:05:56.200 --> 0:05:59.080 um but like you all do as well. I mean, 0:05:59.120 --> 0:06:01.440 we're looking at this same data. There are days to 0:06:01.480 --> 0:06:04.320 be optimistic and then the next day you need to 0:06:04.360 --> 0:06:08.159 be cautious. Something that we did and we'll be releasing 0:06:08.160 --> 0:06:11.800 this very soon is for the second year, we're going 0:06:11.839 --> 0:06:14.880 to be publishing what we call the Outlook on American Life. 0:06:15.480 --> 0:06:18.719 And so we aggregate all of the data from all 0:06:18.760 --> 0:06:22.600 of our clients tax returns to find the themes and trends. 0:06:22.640 --> 0:06:25.359 And you know that tax return is really like financial 0:06:25.440 --> 0:06:28.599 d n A. And so we'll be talking about what 0:06:28.640 --> 0:06:34.280 we're seeing with shifts in employment, retirement, saving, spending, UH 0:06:34.320 --> 0:06:36.680 and look forward to maybe sharing that with you all 0:06:36.680 --> 0:06:38.599 of whom we're ready to release it. Look forward to 0:06:38.640 --> 0:06:44.240 it absolutely so in terms of okay, so we're gonna 0:06:44.279 --> 0:06:47.440 look forward to that. You say, not a recession based 0:06:47.480 --> 0:06:50.320 on this, So you said, I mean, listen, investors are 0:06:50.440 --> 0:06:53.520 certainly plowing into your stock. You seem very optimistic. What 0:06:53.760 --> 0:06:56.159 is it that maybe troubles you a little bit? Is 0:06:56.200 --> 0:06:59.159 there some concern about the FED over doing it and 0:06:59.240 --> 0:07:04.080 putting some slow momentum ultimately into the economy. Yeah, I mean, obviously, 0:07:04.720 --> 0:07:08.520 part of our diversification is to participate in different parts 0:07:08.600 --> 0:07:12.280 of the market. In the tax business, you know that 0:07:12.360 --> 0:07:16.680 business over many, many decades has not been sensitive to 0:07:17.000 --> 0:07:21.680 recession because of the obligation we have as American filers. 0:07:22.240 --> 0:07:26.200 In fact, when economic times get tough, the stakes rise, 0:07:27.200 --> 0:07:30.760 that's when our expertise and value really kick in. So 0:07:30.840 --> 0:07:33.480 obviously we have to execute and continue to build on 0:07:33.520 --> 0:07:36.560 the momentum we have. But that business looks different than, 0:07:36.600 --> 0:07:40.760 for example, in our financial products portfolio, where you know, 0:07:41.120 --> 0:07:44.560 if savings rates are lower and maybe credit is starting 0:07:44.600 --> 0:07:48.160 to rise again and every dollar matters and government subsidies 0:07:48.160 --> 0:07:51.520 are gone, then what we have to do with spruces 0:07:51.600 --> 0:07:55.880 make sure people know that product is a almost completely 0:07:56.040 --> 0:08:00.000 fee free product that offers incredible value to help you space, 0:08:00.080 --> 0:08:02.480 end and save and plan. And so we try to 0:08:02.600 --> 0:08:07.240 lean into how our value proposition is helping consumers because 0:08:07.280 --> 0:08:09.920 we know that every dollar really matters, you know, Cheff, 0:08:09.920 --> 0:08:13.280 there's always a debate when a company has a lot 0:08:13.320 --> 0:08:16.840 of cash on hand whether to uh issue a dividend, 0:08:16.880 --> 0:08:19.320 increase that dividend, or to buy back shares. How to 0:08:19.720 --> 0:08:23.280 what the best avenue is to return that cash to shareholders. 0:08:23.560 --> 0:08:25.400 You guys doing a little bit of both, increasing the 0:08:25.400 --> 0:08:30.320 dividends seven also a new share repurchase authorization one point 0:08:30.400 --> 0:08:33.240 to five billion. How do you think about how to 0:08:33.320 --> 0:08:37.439 return that share that capital to shareholders? Is it is 0:08:37.440 --> 0:08:39.040 it best to do a little bit of each like 0:08:39.040 --> 0:08:42.120 like you're doing, or you know, what's the calculus that 0:08:42.120 --> 0:08:45.120 goes into deciding how to do that? Well, Mike, I 0:08:45.120 --> 0:08:48.040 guess i'd also say the first part is investing in 0:08:48.040 --> 0:08:52.800 our business, which we are absolutely doing now. We're able 0:08:52.840 --> 0:08:56.400 to still, Jennifer, generate significant free cash flow to invest 0:08:56.440 --> 0:08:59.920 in dividends and share repurchase because of our expense may 0:09:00.000 --> 0:09:04.680 management discipline where we're essentially self funding our growth to 0:09:04.800 --> 0:09:08.120 create new products like spruce and to invest in wave 0:09:08.240 --> 0:09:11.480 and other things. So once we make those decisions to 0:09:11.559 --> 0:09:15.360 invest in the business, then we're essentially returning the remaining 0:09:15.400 --> 0:09:19.520 free cash flow to investors. We're committed to our dividend. 0:09:19.679 --> 0:09:23.560 We've been growing the dividend, and if you think about 0:09:23.600 --> 0:09:26.439 on a given year, I think, you know, roughly couple 0:09:26.520 --> 0:09:30.320 hundred million dollars to continue to invest in our dividend 0:09:30.720 --> 0:09:33.680 and the rest two to three hundred millions in share 0:09:33.720 --> 0:09:37.920 by back. So because of the profitability of this business, 0:09:38.320 --> 0:09:40.440 I think we're in a unique position to be able 0:09:40.480 --> 0:09:44.720 to really do all three at an effective way. You know, Jeff, 0:09:44.760 --> 0:09:46.600 it's an interesting story in terms of what you guys 0:09:46.600 --> 0:09:48.600 are doing. We have about a minute left here. As 0:09:48.679 --> 0:09:51.679 you guys have been broadening out, expanding services. I mean, 0:09:51.720 --> 0:09:54.640 part of it is so that you can kind of 0:09:54.800 --> 0:09:57.400 you know, not be see so much of kind of 0:09:57.559 --> 0:10:01.160 positive results. Are so much business momentum kind during tax season, right, 0:10:01.200 --> 0:10:03.440 So are you seeing signs of it that there's more 0:10:03.520 --> 0:10:08.320 business throughout the year? Um, yes, But we're not even 0:10:08.400 --> 0:10:11.240 close to being down the road of that journey yet. 0:10:11.440 --> 0:10:13.720 So you know, again, the lions share of our business 0:10:13.760 --> 0:10:17.240 today still happens in tax season. As we serve more 0:10:17.280 --> 0:10:22.559 small businesses, those dates extend, bookkeeping in payroll becomes year round, 0:10:23.040 --> 0:10:25.800 and clearly the goal for Spruce is to be a 0:10:25.880 --> 0:10:30.200 year around financial products business. We're just in the early innings, 0:10:30.240 --> 0:10:32.840 but that's absolutely the strategy. Alright, gotta be really quick 0:10:32.840 --> 0:10:34.640 thirty seconds. We'd like to do this when we've got 0:10:34.640 --> 0:10:36.720 a leader of a company so well known, what keeps 0:10:36.760 --> 0:10:40.679 you up at night, continuing to meet expectations and all 0:10:40.679 --> 0:10:43.960 the growth we've been delivering us. That's what we're up 0:10:43.960 --> 0:10:46.040 to right now. Yeah, and the expectations are pretty high. 0:10:46.040 --> 0:10:48.559 I mean, as we said, the stock is up here 0:10:48.559 --> 0:10:52.360 in two um. Jeff, Always appreciate time with you, and 0:10:52.480 --> 0:10:54.079 interesting to hear how the story at H and R 0:10:54.240 --> 0:10:56.560 Block really continues to evolve. Thank you so much, Really 0:10:56.559 --> 0:10:59.800 appreciate it as well. Bye bye, well Jeff Jones. He 0:10:59.920 --> 0:11:01.960 is president, chief executive officer of H and R Block, 0:11:02.040 --> 0:11:05.200 joining us via zoom from Kansas City, Missouri. As we mentioned, 0:11:05.200 --> 0:11:08.680 the stock really on a tear today following those earning 0:11:08.720 --> 0:11:12.400 stock mike up more than fifteen percent in today's trade 0:11:12.640 --> 0:11:16.280 and again up so far in Yeah. Picked a good 0:11:16.320 --> 0:11:19.040 day to report some good earnings. Exactly. Everyone's ready to 0:11:19.040 --> 0:11:24.240 buy exactly, really some outperformance. You're listening to Bloomberg Business 0:11:24.280 --> 0:11:28.080 Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic 0:11:28.559 --> 0:11:31.839 on Bloomberg Radio. Okay, you know it's a big economic day, 0:11:31.840 --> 0:11:34.079 you know it's a big market day. But before we 0:11:34.120 --> 0:11:35.600 get into some of the heavier stories of the day, 0:11:35.640 --> 0:11:37.000 we thought we'd take a little bit of a sports 0:11:37.040 --> 0:11:39.160 time out some of the challenges that are out there, 0:11:39.240 --> 0:11:42.600 legal challenges of players in the Saudi Finance Breakaway pro 0:11:42.720 --> 0:11:44.880 Golf Tour. And then you've got Serena trying to have 0:11:44.920 --> 0:11:46.840 it all, and like we know, it's not easy. It's 0:11:46.840 --> 0:11:49.440 not easy. And I can't imagine trying to play a 0:11:49.559 --> 0:11:52.920 Grand Slam tennis event with a young kid at home. 0:11:52.960 --> 0:11:57.240 I I totally get where she's coming from. And being pregnant. Yeah, 0:11:56.520 --> 0:11:59.320 I don't know. It's hard enough to get there, you 0:11:59.360 --> 0:12:03.079 know otherwise, and let alone with little kids and being pregnant. 0:12:03.160 --> 0:12:05.680 So I feel her pain there a little bit, all right, 0:12:05.720 --> 0:12:07.960 So let's get to Scarlet Food, who is a Bloomberg 0:12:08.000 --> 0:12:10.040 Quick Take correspondent. She is also one of the hosts 0:12:10.040 --> 0:12:13.920 of the Bloomberg Business of Sports radio show and podcast, 0:12:14.160 --> 0:12:16.800 and you can check out the Bloomberger Business Sports Podcast 0:12:16.800 --> 0:12:18.920 every Monday, Wednesday and Thursday at Bloomberg dot com. Or 0:12:18.920 --> 0:12:21.400 wherever you get your podcast. She's in our Studio's so 0:12:21.480 --> 0:12:24.720 nice to have you here, guys. Hi. So let's chart. 0:12:24.880 --> 0:12:28.760 Let's start with this pg A battle against a civil 0:12:28.760 --> 0:12:32.080 war engulf. I mean, every day on the terminal, there's 0:12:32.120 --> 0:12:35.000 a story on it. So tell us the latest in 0:12:35.600 --> 0:12:38.440 the controversy. The latest is that there was a judge 0:12:38.480 --> 0:12:42.960 that sided with the PGA Tour basically because the Saudi 0:12:43.200 --> 0:12:47.360 backed Live Golf tournament UM has been making in roads 0:12:47.360 --> 0:12:50.319 into PGA and of course Greg Norman founded this and 0:12:50.360 --> 0:12:53.439 they poached a lot of PGA players, meaning they've recruited 0:12:53.440 --> 0:12:55.120 a lot PJ players, and they paid them a lot 0:12:55.120 --> 0:12:57.800 of money with bonuses, and just for participating in the 0:12:57.840 --> 0:13:00.160 live golf tournament they make money, more money and many 0:13:00.200 --> 0:13:02.920 instances than they would on the PGA Tour. The PGA 0:13:03.400 --> 0:13:06.000 response to this was you're dead to us now, like 0:13:06.160 --> 0:13:08.520 you can't you can't play on our PGA Tour if 0:13:08.559 --> 0:13:12.200 you're going to join live golf. So three players sued 0:13:12.240 --> 0:13:16.640 the p G a basically under making the argument that's 0:13:16.720 --> 0:13:19.560 acting like a monopoly, right that you know you're suppressing 0:13:19.559 --> 0:13:23.480 our wages, aren't they. I mean it's a good case. 0:13:23.559 --> 0:13:27.400 I think they're not employees of either organization, right, Their 0:13:27.400 --> 0:13:30.520 contractors their freelancers in many ways, Like are their NBA 0:13:30.640 --> 0:13:33.480 players who then go play with other leagues? Didn't they 0:13:33.559 --> 0:13:36.640 used to? There's collective bargaining agreements though, and their employees 0:13:36.679 --> 0:13:40.200 of the NBA slightly different, Right, these are freelancers. But 0:13:40.280 --> 0:13:44.200 in this case, you're talking about Live Golf paying the 0:13:44.200 --> 0:13:46.400 players more than they would have made on p G A. 0:13:46.600 --> 0:13:49.719 So the PGAs being sued for suppressing wages when they 0:13:49.760 --> 0:13:52.440 went to go to the league that plays that pays 0:13:52.480 --> 0:13:55.959 them more money. Why can't they all play both? Uh? Well, 0:13:56.080 --> 0:13:58.120 that this is a battle for the soul of golf. 0:13:58.160 --> 0:14:00.880 I mean, the PGA rests on legacy, see on tradition, 0:14:01.040 --> 0:14:03.640 and Live is coming in as an upstart and you know, 0:14:03.760 --> 0:14:06.800 trying to do things differently. The play is different, and 0:14:06.840 --> 0:14:09.679 of course the funding is different because it's funded by 0:14:09.880 --> 0:14:12.160 the Saudi Arabian government. Well, at the end of the day, Squirrel, 0:14:12.160 --> 0:14:14.640 it doesn't it all get back to TV revenue to 0:14:14.800 --> 0:14:17.079 some degree? I mean I love watching golf on TV 0:14:17.200 --> 0:14:20.040 because it's only really do well, it's only score you 0:14:20.040 --> 0:14:23.200 can actually not forcing you know, you could doze off 0:14:23.240 --> 0:14:28.400 for a little bit and we all right, I have 0:14:28.400 --> 0:14:30.920 to try that, but I prefer a good golf nap. 0:14:31.000 --> 0:14:33.440 But then you hear the crowd revs up and wakes 0:14:33.440 --> 0:14:36.240 you up and you watch the replay. But is there 0:14:36.280 --> 0:14:40.120 any path to live getting on TV and to radioactive? 0:14:40.160 --> 0:14:42.760 Do you think? Politically? Um? I mean it is until 0:14:42.800 --> 0:14:45.160 it isn't right. At some point, enough players will go 0:14:45.200 --> 0:14:49.040 over and people will talk it up and the fact 0:14:49.120 --> 0:14:51.960 that or not the fact the argument that Saudi Arabia 0:14:52.040 --> 0:14:56.360 is greenwashing itself. Right, Um, we'll kind of just fall 0:14:56.400 --> 0:14:59.720 into the background and it'll it'll become whatever the players 0:14:59.760 --> 0:15:01.440 make it to be. If enough players go over, then 0:15:01.480 --> 0:15:03.200 it becomes its own thing. Well, and part of the 0:15:03.200 --> 0:15:05.280 problem is like not part of the problem. I think 0:15:05.280 --> 0:15:07.960 of Jamal ka Jogi, right, the journalist, and you saw 0:15:08.000 --> 0:15:11.880 the business community. Everybody pushed back, and then we've seen 0:15:12.000 --> 0:15:14.000 the business community kind of go back to Saudi Arabia 0:15:14.080 --> 0:15:15.840 like it's interesting, right, I think that part of it. 0:15:16.000 --> 0:15:18.560 I don't know. People talk about it and everyone gets 0:15:18.600 --> 0:15:21.000 asked about it, right, All the players who ever lived 0:15:21.000 --> 0:15:22.920 get asked about it, and you know they've all gotten 0:15:23.040 --> 0:15:25.840 very not comfortable. But there's a whole route where they're like, 0:15:25.840 --> 0:15:27.040 I'm going to talk about that. I'm not going to 0:15:27.120 --> 0:15:29.480 talk about it, And after a while they stopped getting 0:15:29.480 --> 0:15:31.080 asked about it and people just kind of move on. 0:15:31.680 --> 0:15:34.720 So it's going to be fatigued with this this line 0:15:34.760 --> 0:15:36.480 of questioning. After while, we knew we needed more time 0:15:36.520 --> 0:15:38.000 with you, but we've only got about a minute left 0:15:38.000 --> 0:15:41.200 here and we buried the lead. Serena Williams retiring, Yeah, 0:15:41.200 --> 0:15:44.040 this is such a huge deal. Basically, I like how 0:15:44.040 --> 0:15:46.400 you put it. Um, she is basically saying she can't 0:15:46.400 --> 0:15:47.640 have it all right now. She wants to have a 0:15:47.640 --> 0:15:50.520 second kid, and she can't do that while she plays 0:15:50.600 --> 0:15:53.040 tennis professionally, so she's going to hang up her tennis 0:15:53.040 --> 0:15:57.240 sneakers and UM, hearing that right, Because she's been such 0:15:57.280 --> 0:16:02.000 an like for women, for fashional sports, like just incredible. 0:16:02.040 --> 0:16:05.360 She's the highest earning female athlete, I mean, forget tennis player, 0:16:05.400 --> 0:16:08.120 female athlete, and she is a force to be reckoned 0:16:08.120 --> 0:16:11.400 with the twenty three time Grand Slam champion, and she 0:16:11.560 --> 0:16:13.520 basically says, I don't think it's fair. If I were 0:16:13.520 --> 0:16:16.120 a guy, I wouldn't be saying this, writing this, because 0:16:16.160 --> 0:16:18.440 I'd be out there playing and winning while my wife 0:16:18.480 --> 0:16:20.920 was doing the physical labor of expanding our family, and 0:16:21.000 --> 0:16:24.320 she actually drew a comparison to Tom Brady. I was 0:16:24.360 --> 0:16:26.000 reading the story, I was I did not know that 0:16:26.040 --> 0:16:28.920 she was married to the co founder Reddit, Alex Ohanien. 0:16:29.720 --> 0:16:31.440 You know, come on, Alex, time for you to step up. 0:16:31.480 --> 0:16:33.200 And he has been stepping up. He's been a big 0:16:33.200 --> 0:16:35.960 advocate for paid paternity leave. But this doesn't change the 0:16:35.960 --> 0:16:38.600 fact that she had a really difficult pregnancy and she 0:16:38.800 --> 0:16:42.480 suffered from postpartum depression and it was really horrible for her, 0:16:42.600 --> 0:16:44.320 you know, the whole thing of getting back on her 0:16:44.360 --> 0:16:46.160 feet to her pregnancy. So she doesn't want to go 0:16:46.200 --> 0:16:48.480 through that again. Take your biology books, because as all 0:16:48.560 --> 0:16:51.160 long as I know, men still can't have women. I mean, 0:16:51.200 --> 0:16:54.000 I mean, I mean what men can't have me? But 0:16:54.040 --> 0:16:55.920 you're right, in many cases men can't have women either. 0:16:56.000 --> 0:17:01.440 But I don't have any comment on at us. Oh 0:17:01.480 --> 0:17:03.360 my god, Friday can't come too soon. We love you, 0:17:03.440 --> 0:17:07.520 Scarlet Food. This is Bloomberg Business Week with Carol Masser 0:17:07.760 --> 0:17:12.720 and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio. It's 0:17:12.760 --> 0:17:15.200 a most read, it's a must read. It's the Bloomberg 0:17:15.200 --> 0:17:18.440 Big take today. It's about how Europe's rivers are running dry, 0:17:18.520 --> 0:17:22.119 disrupting eighty billion in trade routes. It really is a 0:17:22.240 --> 0:17:25.200 sign of the unfortunate times. For this really important story, 0:17:25.359 --> 0:17:28.879 we have Bloomberg News Oil Products reporter Jack Whittles. He 0:17:28.960 --> 0:17:32.160 is joining us on the phone from London. Jack, good 0:17:32.160 --> 0:17:34.400 to have you here with Mike Regan and myself. So 0:17:34.880 --> 0:17:37.639 just lay it out the story, which you can find 0:17:37.720 --> 0:17:40.639 on the Bloomberg terminal and Bloomberg dot com slash big tape. 0:17:40.800 --> 0:17:44.840 A lot of information tell us what's going on. Right, 0:17:44.960 --> 0:17:47.680 So it is really hot in Europe. It's been a 0:17:47.760 --> 0:17:50.440 very hot summer and as a result, a lot of 0:17:50.480 --> 0:17:55.240 the river level was extremely low. Probably the most important 0:17:55.240 --> 0:17:59.800 of them is a rhyme that's about eight hundred miles long. 0:18:00.000 --> 0:18:02.120 It starts in the switch out, so it goes all 0:18:02.160 --> 0:18:05.239 the way down through Europe to the North Sea, and 0:18:05.280 --> 0:18:08.160 that is used to ship a lot of really important 0:18:08.160 --> 0:18:13.080 commodity through the continent, so talking energy, coal, gas oil, diesel, gasoline, 0:18:13.080 --> 0:18:17.879 but also stuff like gravels, some men, iron, ore, you 0:18:17.920 --> 0:18:21.480 know everything. And so when these when the water level 0:18:21.480 --> 0:18:24.439 on the Rhine gets really low, the barges that are 0:18:24.520 --> 0:18:27.600 used to transport all this stuff. They can't take on enough, 0:18:27.760 --> 0:18:31.480 they can't take on their full loads of these commodities 0:18:32.280 --> 0:18:34.080 because the more you load, the lower you get in 0:18:34.119 --> 0:18:36.280 the water. And then when the river is really shallow, they'll, 0:18:36.359 --> 0:18:39.280 you know, they'll hit the bottom. So it's the low 0:18:39.320 --> 0:18:42.600 water is really choking off the supply of energy and 0:18:42.640 --> 0:18:46.440 commodities in Europe, just as you know, just as there's 0:18:46.440 --> 0:18:49.480 a war in Ukraine and we've got problems with Russian 0:18:49.520 --> 0:18:51.240 gas supply. So it's it's a little bit of a 0:18:51.240 --> 0:18:54.040 perfect norm at the moment, you know, Jack, this strikes 0:18:54.080 --> 0:18:56.639 me as a very difficult problem to solve, you know, 0:18:57.200 --> 0:18:59.800 save doing a rain dance or something. I don't know 0:18:59.800 --> 0:19:02.119 how you fix this. So I'm wondering is there any 0:19:02.359 --> 0:19:05.399 sort of hope that this problem couldn't be solved or 0:19:05.440 --> 0:19:07.719 is it more a matter of you know, shipping stuff 0:19:07.920 --> 0:19:11.680 via truck and rail instead? How are how are people 0:19:11.720 --> 0:19:17.080 dealing with this? Right? So if there aren't many very 0:19:17.119 --> 0:19:19.880 easy short term solutions for companies, you know you can't 0:19:19.880 --> 0:19:22.720 You're right, you can. You can use rail, you can 0:19:22.920 --> 0:19:28.719 use road. So you know, Switzerland, for instance, gets imports 0:19:28.760 --> 0:19:30.680 some oil products by the rhyme but it kind of 0:19:30.800 --> 0:19:34.720 it doesn't also get through roads and rails, um and pipeline, 0:19:34.760 --> 0:19:39.080 I believe, so companies can do that, but it's it's 0:19:39.160 --> 0:19:42.400 much more expensive, so that's not always great. The economics 0:19:42.440 --> 0:19:43.840 are not always going to look very good on that. 0:19:44.560 --> 0:19:47.160 And the other thing companies can do is they can 0:19:47.359 --> 0:19:51.520 invest in ships that are specifically designed to you to 0:19:52.080 --> 0:19:56.960 go in shallow waters. Idea the chemicals company, they they've 0:19:57.000 --> 0:19:59.360 invested in a couple of ships to do that. But 0:19:59.440 --> 0:20:02.680 it's not easy. And with climate change, I personally think 0:20:02.680 --> 0:20:05.119 it's probably just going to get worse and worse, to 0:20:05.119 --> 0:20:07.239 be honest. Well, and that's where I want to go, 0:20:07.400 --> 0:20:10.639 because this wouldn't be happening. Is it fair for me 0:20:10.720 --> 0:20:15.280 to make this jump if it wasn't for climate change? Right? 0:20:15.760 --> 0:20:19.120 If the rhine is fed by a combination of rain 0:20:19.440 --> 0:20:23.320 and melting glass ears, and the more the you know, 0:20:23.760 --> 0:20:25.679 the lower and lower the glass ears get, and then 0:20:25.760 --> 0:20:27.840 the less they can feed the rhine. I'm I'm not 0:20:27.880 --> 0:20:30.520 a cinc climate scientist, so I'm not going to try 0:20:30.520 --> 0:20:33.240 and say this specific event was pinned down to climate change, 0:20:33.240 --> 0:20:36.399 but in general, that's the way it's going and and 0:20:36.480 --> 0:20:38.760 it's I can only see it getting worse really, Right, 0:20:38.800 --> 0:20:41.240 those alpine glaciers, right, they feed into all of this, 0:20:41.320 --> 0:20:43.560 and we know, kind of to some extent, maybe some 0:20:43.640 --> 0:20:47.920 of that's you know, going away. They're getting smaller. Yeah, 0:20:47.960 --> 0:20:51.159 they're getting smaller and smaller. Jack, I'm wondering where we 0:20:51.160 --> 0:20:54.119 should look for this crisis to sort of have the 0:20:54.160 --> 0:20:56.480 most potential damage. You know, is it a matter of 0:20:57.200 --> 0:21:01.919 you know, BMW Mercedes not being able to produce cars 0:21:01.960 --> 0:21:04.480 at some point because they can't get supplies, or is 0:21:04.520 --> 0:21:07.440 it there's something more acute, you know, like electricity going 0:21:07.480 --> 0:21:10.560 off in Germany. Where where will this really start to 0:21:11.080 --> 0:21:16.280 cause the most problems? Well, as an energy reporter, I 0:21:16.359 --> 0:21:18.879