Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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Speaker 3: Well, we are joined here in studio by Jason Kelly,
Speaker 3: Chief corresponding for Bloomberg Originals and executive producer of a
Speaker 3: new podcast, It's called The Deal with Alex Rodriguez and
Speaker 3: Jason Kelly. On this week's episode of The Deal, Alex
Speaker 3: Rodriguez and Jason Kelly speak with you as soccer legend
Speaker 3: Brandy Chastain about private equity firm Six Streets Sports investments
Speaker 3: and the bay FC owners.
Speaker 4: Hope for the sports.
Speaker 3: She also talks about if the world is ready for
Speaker 3: women's sports, Let's take a listen.
Speaker 5: I honestly believe that part of the equation that wasn't
Speaker 5: in our control was the mass, general public and the
Speaker 5: business sector not ready for women, not ready for powerful women,
Speaker 5: not ready for women with big voices who have grand ideas.
Speaker 5: We didn't have the deep pockets, and before coming here today,
Speaker 5: I think that's the one thing that kept coming into
Speaker 5: my head was I had zero dollars that I could
Speaker 5: be an owner with all right, very.
Speaker 3: Good stuff, Jessica che Chestain with our own Jason Kelly. Jason,
Speaker 3: thanks for cover much for coming into the studio. Big
Speaker 3: commute from your desk. You got a guest with you.
Speaker 4: I know, I brought a buddy. I thought it was
Speaker 4: bringing I thought it was bringing your former all star
Speaker 4: friend to workday. Oh is it?
Speaker 6: Oh?
Speaker 4: Yeah, sorry, I've remembered. I mean I'm a good sit Yeah.
Speaker 4: Hey Rod, my co host right here with me. Awesome,
Speaker 4: Thanks for coming in, Alex, appreciate it. Great to be here.
Speaker 4: Thank you guys.
Speaker 3: You guys, I've had so many cool podcasts and episodes
Speaker 3: here speaking to some really cool people. Jessica Chestain, I
Speaker 3: think for Brandy chester Brand, Brandy Chestain different chestin.
Speaker 4: Yeah, just amazing.
Speaker 3: Yeah, kind of when you think about nineteen ninety nine,
Speaker 3: the world ripping the jersey off and everything, just that
Speaker 3: that's such a big image and you kind of thought
Speaker 3: she maybe that would be the launch of right women's soccer,
Speaker 3: at least maybe women's sport. We haven't, I'm not sure
Speaker 3: we've seen it. What'd you guys talk.
Speaker 4: About I mean, I thought it was so fascinating Alex
Speaker 4: because you know, she's an icon, right. I mean when
Speaker 4: you think about like the people who have defined sports
Speaker 4: in our lifetimes, especially in women's sports, like nobody bigger
Speaker 4: than Brandy Chastain. And the amazing thing was that this
Speaker 4: moment in nineteen ninet nine, it was gonna be like
Speaker 4: the takeoff for women's sports, and it's like womp wamp,
Speaker 4: like it just didn't happen. It actually failed twice, and
Speaker 4: now she's an owner of a team. I was fascinated
Speaker 4: by just kind of her perspective on all that. I
Speaker 4: don't know if you were.
Speaker 7: I thought it was great. And if you see what's
Speaker 7: happened with Caitlyn Clark, now, we thought that was gonna
Speaker 7: happen ninety nine and it kind of stalled, as Jason said,
Speaker 7: But for me was how she's kind of going through
Speaker 7: her journey from sports to business as a sports owner
Speaker 7: and all the lessons that she's learned sports, the hard times,
Speaker 7: the good times. She shared some incredible stories. But I'm
Speaker 7: really interested how her next decade goes because she's all in.
Speaker 6: Can I ask it? Okay, first of all, we should know,
Speaker 6: I know very little about sports. So I'm going to
Speaker 6: ask this question. I have a question about energy power prisons.
Speaker 6: You can come to me, But why is it so
Speaker 6: hard for women's sports to take to take off in
Speaker 6: a material of way? Is it like the type of
Speaker 6: sports we play? What's the problem, Alex? What do you think?
Speaker 8: Well?
Speaker 7: I think Kaylen Clark has captured the imagination of everyone.
Speaker 7: And I'm old enough to remember when the NBA was on.
Speaker 7: You watch the finals on tape delay, right, it was incredible,
Speaker 7: right to think about that and the amount of tens
Speaker 7: of millions of people that watch today. What Kayln Clark
Speaker 7: has done is very much what I think Magic Johnson
Speaker 7: and Larry Bird did in nineteen seventy nine, when you
Speaker 7: know Bird was at Indiana State, Magic was at Michigan State,
Speaker 7: and it was like these two Midwestern guys that captured America.
Speaker 7: I think that is now here is true the moments right.
Speaker 7: I think post COVID de Lance, the world has changed,
Speaker 7: and I think it's been a perfect storm and she's
Speaker 7: been the perfect ambassador. To have almost twenty million people
Speaker 7: watching this is incredible.
Speaker 4: And by the way, more people watched the Women's final
Speaker 4: this year than the men's final first time in history,
Speaker 4: and that actually, I think is one of the biggest
Speaker 4: points of this is that there was long this assumption
Speaker 4: of like, people are gonna watch women's sports on TV,
Speaker 4: and so they just didn't put it on. I mean, shockingly,
Speaker 4: a bunch of men made a decision that people wouldn't
Speaker 4: watch women on TV. And then what happened was they
Speaker 4: saw and you've seen this in your investment work, Alex,
Speaker 4: what they saw was when they did put it on
Speaker 4: the air, people watched and then it just kept building.
Speaker 4: And I think the other really interesting thing that we
Speaker 4: learned from Brandy was this idea that the investment wasn't
Speaker 4: there initially. I mean, those two leagues failed because the
Speaker 4: two previous soccer leagues for women in the US failed
Speaker 4: because they tried it for like a year or two
Speaker 4: and they're like, oh, that didn't work. Instead of you know,
Speaker 4: you think about the NBA, you think about the NFL,
Speaker 4: those were leagues that took decades to take hold. The
Speaker 4: MLS is in its like twenty fifth thirtieth season and
Speaker 4: is just getting traction. So part of it is just
Speaker 4: like putting in the time in the month. I think,
Speaker 4: you know, it's a former Wall Street guy, What makes
Speaker 4: me about this transaction? You got private equity, yes, coming
Speaker 4: private acquas not in Major League Baseball are there?
Speaker 7: Yea?
Speaker 4: Now they are getting there. I mean this is a
Speaker 4: big thing that you're seeing up close and personal.
Speaker 7: Yeah, I mean sports have these franchises have gotten so expensive.
Speaker 7: To think a guy like Jerry Reinsdorf bought in nineteen
Speaker 7: eighty one the White Sox for about sixteen million dollars,
Speaker 7: and three years later, in eighty four, he buys the
Speaker 7: Bulls with a guy with the name of Michael Jordan
Speaker 7: already there for nineteen million dollars. It's incredible, right, and
Speaker 7: those franches are worth close to ten collectively today.
Speaker 4: So the world has exploded.
Speaker 7: So what's happened is individuals can't really afford to write
Speaker 7: checks for a billion two million dollars. It's hard to
Speaker 7: have the type of liquidity. So what that leagues have
Speaker 7: done is they've opened up the capital markets and private
Speaker 7: eco groups like Arctos and Dial are now big investors.
Speaker 7: And they said as LPs while passive LPs it's been
Speaker 7: an industry for the last thirty years, has gone up
Speaker 7: into the right about fifteen percent a year a year
Speaker 7: over year.
Speaker 6: And this is why Jason you were here because you've
Speaker 6: covered private equity for a very long time. You literally
Speaker 6: wrote books on it, and then you kind of saw
Speaker 6: a while ago like where the direction of travel was
Speaker 6: really going, Yeah, what's the kind of the return? Like
Speaker 6: what's the return like on these things? Like like what
Speaker 6: do you think?
Speaker 4: I mean TBD A little long pause. Well, because we
Speaker 4: haven't really you know, we've seen a couple exits. I mean,
Speaker 4: so Dial made some money on the Phoenix Suns when
Speaker 4: they were sold for four billion dollars a couple of
Speaker 4: years ago, So that's been one exit. I mean what's
Speaker 4: interesting is so Sixth Street. Just speaking specifically about Sixth Street,
Speaker 4: and you know this is started by Alan Waxman, former
Speaker 4: special situation said for Goldman Sachs was in a partnership
Speaker 4: with TPG. You know, so they've invested one hundred and
Speaker 4: twenty five million. They led an investment for one hundred
Speaker 4: and twenty five million dollars into BAFC. I mean that's
Speaker 4: real money, paid a record franchise fee fifty three million
Speaker 4: dollars just to buy the team. I mean they're looking
Speaker 4: at a scenario where they can get a five x
Speaker 4: ten X. I mean, this is a long hold. So
Speaker 4: the franchise values, as Alex just demonstrated, I mean, think
Speaker 4: about I mean, Jerry Jones bought the Dallas Cowboys for
Speaker 4: less than two hundred million dollars in the late eighties
Speaker 4: early nineties, which, by the way, they said he was insane.
Speaker 4: That was a crazy amount. This is a franchise now
Speaker 4: worth nine or ten billion dollars. Alex, let's talk about ownership.
Speaker 3: You're part of an ownership group for the Minnesota Timberwolves, right,
Speaker 3: talk to us about that experience, and I love you
Speaker 3: to talk to you about My personal opinion is I'm
Speaker 3: concerned about the evaluation of franchises. I'm concerned about salaries
Speaker 3: because it's all predicated in large part.
Speaker 4: On broadcast rights.
Speaker 3: Yeah, and with cord cutting, I'm not sure ESPN's going
Speaker 3: to continue to write these crazy checks. So talk to
Speaker 3: us about kind of what you've learned about as being
Speaker 3: an owner there.
Speaker 7: It's funny because one of my good friends and mentors
Speaker 7: of Magic Johnson, and of course he played basketball for
Speaker 7: a long time and he owns a baseball team, and
Speaker 7: I played baseball for a long time, and I'm part
Speaker 7: of the ownership group of the Minnesota Timberwolves and the Lynks.
Speaker 7: You know what I think is there's no question that
Speaker 7: the giant in sports in America's NFL. Right, And to
Speaker 7: think that, you know, almost twenty million people watch Kayln Clark.
Speaker 7: Those are NFL numbers on Sundays. I mean that is
Speaker 7: that's the number one driver for all sports and which
Speaker 7: creates a lot of people to be very bullish in
Speaker 7: women's sports. But going back to well we have the
Speaker 7: links as well. But I do think that the NFL
Speaker 7: and the NBA are global sports, especially the NBA.
Speaker 4: It's growing year over year.
Speaker 7: If you look at social media as an example. As
Speaker 7: a metrics, we're almost ten to one to the NFL.
Speaker 7: We're almost fifteen to one to Major League Baseball. So Lebron, James,
Speaker 7: Michael Jordan, Steph Curry, these are global names. I think
Speaker 7: that is going to be a different landscape. But you'll
Speaker 7: have more contributors. Maybe you have NBC pop in Amazon.
Speaker 4: Apples, a lot of shooters.
Speaker 7: Is not going to be the traditional So ESPN may
Speaker 7: not write as big as check, but is there. I'm
Speaker 7: not speaking for the NBA. I'm just giving you my
Speaker 7: opinion that you may have a world where NBC may
Speaker 7: split the finals with ESPN and ABC, So I think
Speaker 7: you'll get to a similar result, just a different way.
Speaker 6: So you said those words, and I knew those people,
Speaker 6: so I feel like I'm not qualified ask this question.
Speaker 6: But then for someone like me who's a newbie who
Speaker 6: maybe wants to watch some stuff like I'm I don't know,
Speaker 6: I would I need like a spreadsheet to like find
Speaker 6: out like what's playing where or when what time, like
Speaker 6: Amazon Prime, Netflix, something like that. And I wonder if
Speaker 6: that's going to be a hurdle. Jason, what do you think.
Speaker 4: To like, I mean, it could be. I mean, and
Speaker 4: Paul knows this space better than anyone. You know, there's
Speaker 4: been sort of a fracturing, but now sort of a reconsolidation.
Speaker 4: It feels like of how we're going to consume sports.
Speaker 4: I mean, you've followed this for years. You know that
Speaker 4: live sports. Alex knows it from being on tele Division
Speaker 4: and being broadcast himself. People love live sports and that
Speaker 4: it's one of the only things that actually keeps people
Speaker 4: coming back to live content. I do think, though, we
Speaker 4: are in this weird world where sometimes you don't know
Speaker 4: where to find it, and yet when you do, it
Speaker 4: attracts the eyeballs. My New York Yankees off to a
Speaker 4: great start this year.
Speaker 3: Yes, what's your scouting You could say an hour New
Speaker 3: York games in this room. Also a great start this year,
Speaker 3: and now what's your scouting report of them?
Speaker 7: Well, I think the Yankees have done a bunch of
Speaker 7: good things this year.
Speaker 4: Excuse me.
Speaker 7: One of them is they've introduced baseball people back. If
Speaker 7: you think about the powerhouse of the Yankees, they've been
Speaker 7: built by great baseball people like Geene Michael's Stick Michael
Speaker 7: as they call them, you know, Lupenela, Billy Martin. They've
Speaker 7: gone away from that the last four or five years,
Speaker 7: and they've suffered tremendously. The fact they brought baseball people
Speaker 7: back in. They brought a much more balanced lineup, meaning
Speaker 7: Alex there's more lefties than righty's. Historically, Yankee Stadium is
Speaker 7: better for lefties. Last year they have like nine righties
Speaker 7: in the lineup, which just way too much. They've gone
Speaker 7: back to a much balanced lineup and now they have
Speaker 7: the best one two punch in the sport with Aaron
Speaker 7: Judge and Juan Soto. The challenge is do they have
Speaker 7: enough pitching is one and two? They have they cornered
Speaker 7: themselves by bringing in Juan Soto and not have a
Speaker 7: long term contract. Where now? Is he gonna want the
Speaker 7: tiny contract for seven hundred million dollars? And is he
Speaker 7: just a one year wonder here in New York? I
Speaker 7: think he's gonna have a massive year.
Speaker 2: Yep.
Speaker 7: The question is can they keep them? Second question is
Speaker 7: do they have enough pitching to win the title?
Speaker 3: Well, let me ask you that question. We like to
Speaker 3: think New York fans that New York is a selling
Speaker 3: point everybody would love to be. If you can be
Speaker 3: a star here, you can be a star anywhere. There's
Speaker 3: nothing better to be a star than New York City.
Speaker 3: A lot of players, it's that I think they find
Speaker 3: it hard to play in New York.
Speaker 4: What was your experience coming to New York. I know
Speaker 4: you're a New Yorker, so you you kind of know this,
Speaker 4: But some of the people you saw during your career.
Speaker 7: No, Paul, You're exactly right. I mean some people, you know,
Speaker 7: the kitchens maybe a little bit too hot for some players,
Speaker 7: and you know right away if they're uncomfortable, it's a
Speaker 7: different place. He's the biggest media market in the world.
Speaker 7: As they say, the pinstripes are very very heavy and
Speaker 7: not everyone can carry them. Juan SODA's obviously one that
Speaker 7: is going to play and play really well. Aaron Judge.
Speaker 4: The Jetters of the.
Speaker 7: World, they're icons for life because they won here in
Speaker 7: New York. But some, I mean they melt into the sun.
Speaker 7: I mean, you've seen a couple over the last four
Speaker 7: or five years that were a shell of themselves and
Speaker 7: you quickly have to pivot and get them out of here.
Speaker 2: Yep.
Speaker 4: One interesting thing on that note. First of all, we
Speaker 4: talked about Michael talked to Michael Strahan about that on
Speaker 4: the previous episode of The Deal. One person we are
Speaker 4: literally going to tape with today, it's one of the
Speaker 4: reasons Alex is in the building is stephen A. Smith,
Speaker 4: and he's actually talked about Soto and like the power
Speaker 4: of the pin stripes maybe enough to lure him in
Speaker 4: to stay. So yeah, tune into that episode of The
Speaker 4: Deal coming up in a few weeks because stephen A
Speaker 4: he's got literally some takes. It's a sole job, that's
Speaker 4: what he does, and what a career.
Speaker 6: So this is this is really cool, Like what you guys,
Speaker 6: do is super fun. Jason comes in and he talks
Speaker 6: about it and you can tell he's like totally digg
Speaker 6: is what's it like to work with Jason Kelly? How
Speaker 6: do you manage that guy? Like?
Speaker 4: What, Alex?
Speaker 7: We already made a deal this morning because we are
Speaker 7: you know, he's covered private equity. He's a great writer,
Speaker 7: so I say, he writes, and I used the bat
Speaker 7: so I hit he writes, and.
Speaker 4: We made a good team.
Speaker 7: But no, Alex, in all seriousness, is really the intersection
Speaker 7: of Jason's career, mostly here at Bloomberg, in my career
Speaker 7: mostly with the Yankees. And the fact is what we're
Speaker 7: talking about is exactly both. And we live in a
Speaker 7: world where it used to be sports and media and culture.
Speaker 7: Now all three have come together, and that's what we
Speaker 7: try to take away. And then also a lot of
Speaker 7: lessons learned in this world of Shark Tank where young
Speaker 7: people want to be more entrepreneurs than athletes, right, And
Speaker 7: that's I think we're serving up and teaching and hoping
Speaker 7: and inspiring through storytelling.
Speaker 3: A lot of greats and I like you guys do
Speaker 3: kind of bringing sports, entertainment, you know, all that together
Speaker 3: and we're seeing it actually now in college sports with
Speaker 3: it the nil the transfer portals, a lot of these
Speaker 3: kids are able to monetize their value totally.
Speaker 4: But there's some downside to that. It seems like if
Speaker 4: you talk to you know, coach j.
Speaker 3: Right at Villanova or maybe even coach k I'm going
Speaker 3: to see today down at Duke or some others, they're saying, boy,
Speaker 3: I'm not sure, maybe we've gone too far. What do
Speaker 3: you think, Alex about what's happening in the college ranks
Speaker 3: about paying some of these athletes.
Speaker 4: It's a very dangerous road.
Speaker 7: It's a very dangerous and very slippery and the reason
Speaker 7: why I love that players are getting you know, the
Speaker 7: finances and all of that. But maybe there's a structure
Speaker 7: where there's more parity. Maybe there's a structure where kids
Speaker 7: don't get the money when they're not ready for it
Speaker 7: and they get in trouble by not knowing how to
Speaker 7: pay taxes, And is this more of a liability than
Speaker 7: an asset. I'm all for somebody getting market value, but
Speaker 7: is there a world that we can, you know, hold
Speaker 7: unto their thirty or thirty five until they get the
Speaker 7: majority of that where that money is compounding for them,
Speaker 7: so gift from the curse. And the other part is
Speaker 7: that I'm concerned is we want to teach Coach k
Speaker 7: is one of my great friends and one of the
Speaker 7: great great personalities in all of sports. You want athletes
Speaker 7: to be around coach k for three or four years,
Speaker 7: not just one great point. So and same thing with
Speaker 7: Kyle Party and all of that. So we want to
Speaker 7: teach these kids that you know the power of restriction
Speaker 7: and to be able to wait a little bit before
Speaker 7: they get you know, the marshmallow, as they.
Speaker 6: Say, before you let you go. And this is a
Speaker 6: question we ask everybody, So, hey, why not you What
Speaker 6: are you gonna buy?
Speaker 1: Now?
Speaker 6: What do you like?
Speaker 4: This is a question. We have support folio matter what,
Speaker 4: You've got a lot of investments.
Speaker 6: Yeah, so what do you like?
Speaker 4: You know that is a great question.
Speaker 7: I mean, I'm so excited about the Minnesota Timbles and
Speaker 7: the Lynx and we've done a lot of good work
Speaker 7: over the last three years. We've been in first place
Speaker 7: for most of the year, only two games remaining, so
Speaker 7: we're sound to make a poison to make a good run,
Speaker 7: hopefully in the postseason. But look, I think you wake
Speaker 7: up every day you're prepared, you're ready for opportunities. That's
Speaker 7: exactly how the opportunity of the timbulves came up and
Speaker 7: the links. So the answer is, I don't know, but
Speaker 7: we're always looking.
Speaker 4: What are you guys going to ask steven A. I
Speaker 4: can't imagine this thing could get heated quickly, you know.
Speaker 4: I mean what I'm really interested in with him is
Speaker 4: the business of stephen A. You know, I mean, because
Speaker 4: he he's a game changer in so many ways. You know,
Speaker 4: we both had chance to read his book ahead of this.
Speaker 4: I mean, this is a guy who completely reshaped the
Speaker 4: business of sports media. My sheer force of will got
Speaker 4: knocked down a bunch. He had a great mentor in
Speaker 4: Mark Shapiro, another upcoming guest on the deal. I'm just
Speaker 4: telling all of our guests here, that's what I did.
Speaker 4: Shameless plug, shamelessly, that's my middle name. But you know,
Speaker 4: for stephen A, I think we don't know where it's
Speaker 4: going to go. We know he doesn't like the Dallas Cowboys,
Speaker 4: he doesn't, and he does love the Yankees.
Speaker 7: And I just say, in conclusion, with Steven A is
Speaker 7: really a story of rags to riches, But it hasn't
Speaker 7: been straight up into the right. I mean to think
Speaker 7: most people forgot this reading his book. I just remembered
Speaker 7: he got fired from ESPN, he had to go to
Speaker 7: Fox Radio, and then he's come back. And to think,
Speaker 7: not only is he going to be the first guy
Speaker 7: that makes person that makes over probably twenty to twenty
Speaker 7: five million, but he's also could be the next Johnny Carson. Yeah,
Speaker 7: and he's built an incredible business and I can't wait
Speaker 7: to ask.
Speaker 4: Them Michael Strahan talk about another mazing career coming in entertainment.
Speaker 4: All right, guys, thanks very much.
Speaker 3: Podcast It's called The Deal with Alex Rodriguez and Jason Kelly.
Speaker 3: On this week's episode of The Deal, Alex Rodriguez and
Speaker 3: Jason Kelly speak with US soccer legend Brandy Schestain about
Speaker 3: private equity firm Sixth Street Sports Investment and the Bay
Speaker 3: FC owners hope for the sports. She also talks about
Speaker 3: if the world is ready.
Speaker 4: For women's sports. So take a listen to that good stuff.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 2: otto With the Bloomberg Business app. You can also listen
Speaker 2: live on Amazon Alexa from our flagship New York station,
Speaker 2: Just say Alexa play Bloomberg eleven thirty Caroly Paul.
Speaker 6: Amazon had a let her out today.
Speaker 4: Yeah, this is something to do.
Speaker 6: Is that a thing we do?
Speaker 1: No?
Speaker 4: Well, I think we start doing it now with mister Jesse.
Speaker 6: M hmm, okay, I mean do we care about Amazon letters?
Speaker 6: Is that something that.
Speaker 3: I mean, there's so big and its retail goes to
Speaker 3: the consumer. It's now they're a tech behemoth. They're now
Speaker 3: huge advertising play. So I think the answer is yes.
Speaker 3: And so let's check in with an expert. Punam Goyle,
Speaker 3: senior US retail analyst for Bloomberg in Intelligence. She joins
Speaker 3: us from our Princeton offices down there in.
Speaker 4: The swamps of New Jersey. Punam, what did you make
Speaker 4: of this letter? I mean, I think mister Jasse is
Speaker 4: trying to just make sure that the market doesn't take
Speaker 4: its attention away from the fact that Amazon is in
Speaker 4: effect an AI play.
Speaker 1: That is part of the story. Definitely. I think the
Speaker 1: focus on the letter goes into all its businesses, starting
Speaker 1: with retail, where they continue to push the envelope on
Speaker 1: value and driving that GMB higher through its logistics platform
Speaker 1: where they're improving same day delivery and really taking costs
Speaker 1: out of the equation as much as they can. On
Speaker 1: the AWS side, AI is the name of the game,
Speaker 1: and they want to make sure that they are visible
Speaker 1: that they are playing in that space and that is
Speaker 1: going to improve every part of their business, not just
Speaker 1: AWS alone, but in terms of AWS.
Speaker 6: It feels like what they were saying is that AWS
Speaker 6: is going to be the foundation for all the AI plays.
Speaker 6: Is that Am I reading that correctly?
Speaker 4: Yeah?
Speaker 1: I mean, you know, where AI is built is going
Speaker 1: to be inside of AWS. For Amazon, They're going to
Speaker 1: be building or you could call it, the raw materials
Speaker 1: of the codes and really providing that as an entry
Speaker 1: point for businesses that use AWS and even within their
Speaker 1: own businesses to create the efficiencies and the speed that's
Speaker 1: needed to operate in the agile environment we live in
Speaker 1: today and compete with OpenAI.
Speaker 3: You know what I've learned since moving down to the
Speaker 3: Jersey Shore is Central New Jersey and southern New Jersey
Speaker 3: is like a warehouse capital.
Speaker 4: Of the world. It seems like everywhere you go and
Speaker 4: Punam lives around.
Speaker 6: There, is it all Amazon or just it's everything.
Speaker 4: It's everything about tons and tons of Amazon because you
Speaker 4: got and you get to part and the gardens, the
Speaker 4: State Parkway, got the new Jersey Turnpike, Philadelphia Port, New
Speaker 4: York Port. I think it's all there. It's just amazing.
Speaker 4: So pun them, I mean, talk to us about do
Speaker 4: investors that you talk to that they still want Amazon
Speaker 4: On to invest aggressively in their retail operations? There is
Speaker 4: there more to go there and to investors, are they
Speaker 4: okay with that given that maybe some of those dollars
Speaker 4: could be to the cloud, or maybe Amazon has got
Speaker 4: so much money they can invest in anything they want.
Speaker 1: I mean, I think they need to invest in both
Speaker 1: the cloud and retail. I don't think you want them
Speaker 1: to stop investing in retail because remember, Paul, as the
Speaker 1: retail business grows, which we estimate the GMA to grow
Speaker 1: to our trillion dollars in the next coming years, that
Speaker 1: impacts their advertising business, right, which has grown to nearly
Speaker 1: fifty billion dollars today. The bigger retail gets, the more
Speaker 1: money they can get for advertising too. So there is
Speaker 1: a connection here and that's how retail is made profitable.
Speaker 6: What also is interesting, aside from retail is what they
Speaker 6: said about their Amazon Prime Video. They seem to think
Speaker 6: it could be its own standalone, like good enough to
Speaker 6: live on its own. What did you make of that?
Speaker 1: I thought that was interesting. You know, Amazon Prime Video.
Speaker 1: We know that it's something that they've been investing aggressively.
Speaker 1: But I think the game changer here really is going
Speaker 1: to be advertising again. Where as they implement ads within
Speaker 1: the Prime videos, that's what's going to take it to
Speaker 1: be profitable. Whenever that is. We haven't run the model yet,
Speaker 1: but we think there's still a bit of time before
Speaker 1: you can say that Prime Video on a standalone entity
Speaker 1: is going to be profitable.
Speaker 6: Do you do prime video?
Speaker 4: I'm going to just say yes.
Speaker 3: I mean, you know, you know what I do periodic
Speaker 3: and maybe I'll do it on the plane ride down today.
Speaker 4: Is I just go through and I delete.
Speaker 3: Them all, you know, just periodically go and just delete
Speaker 3: like I don't need this right now. I mean, you know,
Speaker 3: because it's so easy to delete. Is as opposed to
Speaker 3: trying and disconnect from Verizon or Comcast, which takes like
Speaker 3: a half a lifetime.
Speaker 6: It's true at the one hundred percent, and then there's
Speaker 6: weird fees and it doesn't work in the whole thing.
Speaker 3: Hey, put, what's the what's the investment call on Amazon
Speaker 3: these days? I'm looking at the stock here, it's up
Speaker 3: twenty two percent year to date, it's up over eighty
Speaker 3: percent or but the trailing twelve months, so it's really
Speaker 3: performed well. We're just under two trillion dollars in market cap.
Speaker 3: When when you talk to investors kind of why do
Speaker 3: people own it today? Why do people buy it today?
Speaker 1: We think it's all about profitability. For the longest time,
Speaker 1: for over two decades, Amazon was about market share gains
Speaker 1: and top line gains. Today we're starting the store to
Speaker 1: see the story turn into a profit play. So as
Speaker 1: Aws climbs to over two hundred billion dollars in revenues,
Speaker 1: which we expect, as the GMV for its online business
Speaker 1: climbs to over a trillion dollars, and as advertising gain
Speaker 1: scale to over one hundred billion dollars, you're talking about
Speaker 1: the profit ability of this company improving vastly. Just last year,
Speaker 1: you know, the profit's improved to about over six percent
Speaker 1: from two percent the year before that. So we're starting
Speaker 1: to see that play out, and we think the road
Speaker 1: ahead is still very clear in terms of how they
Speaker 1: parse out their way to be even more profitable.
Speaker 6: Put before we let you go. Usually the reason why
Speaker 6: we like the Jamie Diamond letter is because we get
Speaker 6: really great macro reads and like calls on raids and
Speaker 6: opinions about the FED. Did we get any of that
Speaker 6: from Anny Jassey and of like consumer outlook, how their
Speaker 6: end user me, how I'm doing in the market.
Speaker 1: Well, they talked a little bit about value and how
Speaker 1: they continue to really focus on low prices, which they
Speaker 1: had done in four Q with Prime Prime Day, and
Speaker 1: they also launched earlier this year a Spring Day sale.
Speaker 1: So we do see that push on value, which tells
Speaker 1: us that the consumer cares about prices. So they are
Speaker 1: being sensitive to that and responding to that, and we
Speaker 1: don't expect that to change as a year unfolds.
Speaker 3: I tell you if I were an investor here, it'd
Speaker 3: be for this reason. Free cash flow in twenty twenty
Speaker 3: three thirty two billion.
Speaker 4: Nice.
Speaker 3: How about twenty twenty four sixty three billion is the
Speaker 3: forecast and in twenty five eighty three billion a free cashlow,
Speaker 3: So growth and free.
Speaker 4: Cash flow put in, what do they do with the
Speaker 4: free cash flow?
Speaker 1: They're going to invest it back in the business. Right
Speaker 1: as you said it. They still need to invest in AI,
Speaker 1: they need to invest in AWS, and they need to
Speaker 1: invest in logistics, so that will be the primary drivers
Speaker 1: of their cash investments.
Speaker 6: How I guess is the question. Rightly, they can't go
Speaker 6: buy stuff, can they? Because of all the regulatory scrutiny
Speaker 6: over big tech in that way. I mean, they can't
Speaker 6: just go by TikTok for example.
Speaker 1: No, I don't. I think it'll be much harder for
Speaker 1: them to make an acquisition. They have to grow organically,
Speaker 1: and they have to invest in their own businesses. That said,
Speaker 1: there's plenty of opportunity for them to invest in what
Speaker 1: they own, whether it's across advertising, prime video, their retail business,
Speaker 1: and AWS. There's still a long runway for them to go.
Speaker 1: Digital commerce alone is just at twenty five percent penetration
Speaker 1: in the US and probably a little over that globally,
Speaker 1: So there's opportunity across all of their businesses, even their
Speaker 1: biggest business.
Speaker 4: Yeah.
Speaker 3: I mean, they're spending you know, sixty billion dollars a
Speaker 3: year in capital expenditure, so it's sound like they're you know, yeah, exactly,
Speaker 3: all right. Put them thanks so much for joining us there.
Speaker 3: Put them Goyle, senior US retail analysts for Bloomberg Intelligence,
Speaker 3: Joining us from our studios down in Princeton, New Jersey.
Speaker 2: You're listening to the Bloomberg Intelligence podcast live weekdays at
Speaker 2: ten am Eastern on Effocarplay and Android Otto with the
Speaker 2: Bloomberg Business App. Listen on demand wherever you get your podcasts,
Speaker 2: or watch us live on YouTube.
Speaker 6: We also cover Bloomberg Big Take stories, and that's when
Speaker 6: we take a broad look at some of the major
Speaker 6: trends in the market and we dive deep. And they
Speaker 6: are really amazing stories and they're worth a ton of work.
Speaker 6: And the one today blew my brain And for a
Speaker 6: mother of a daughter who's nine and a half, I
Speaker 6: gotta tell you, I love the story. This has to
Speaker 6: do with basically your return on investment for Ivy League colleges,
Speaker 6: private colleges, Mini ivys, public schools, et cetera. And it's
Speaker 6: very different from what you may think. Joining us now
Speaker 6: are the personal finance reporters in charge of the story,
Speaker 6: Paulina Chiceriro and Francesca Maglioni. Joining us now live in
Speaker 6: our inactive broker studio. Ladies, First of all, how did
Speaker 6: you come up with this. I would never have thought
Speaker 6: of sort of putting a bloomberg angle ROI of college
Speaker 6: in this particular regular light. How did you guys together
Speaker 6: come up with it?
Speaker 9: Yeah, So we had been talking to a bunch of families,
Speaker 9: college counselors, parents and kids that were nervous about getting
Speaker 9: into college, thinking about the cost of college, thinking is
Speaker 9: it even worth it? And we kind of wanted to
Speaker 9: give people a number to answer their question, like, yes,
Speaker 9: everyone says college is overwhelmingly worth it, but like, how
Speaker 9: does that change depending on the school that you're looking
Speaker 9: at and the kind of institution that you're thinking of attending.
Speaker 9: So we kind of wanted to give people a tool
Speaker 9: to answer that question a little bit more.
Speaker 2: Yeah, and smart way.
Speaker 10: Francesca has done really a lot of great reporting tracking
Speaker 10: just how much colleges costs, especially elite institutions. She wrote
Speaker 10: a great story about how college is today, the elite
Speaker 10: colleges that most students want to get into, the costs
Speaker 10: are stretching past ninety thousand dollars.
Speaker 4: Paul knows.
Speaker 6: Paul knows aware.
Speaker 10: And so when you think of those costs, I think
Speaker 10: a lot more families are being forced to consider, like
Speaker 10: what is the ROI, and they've been doing these calculations themselves,
Speaker 10: so we wanted to, you know, crunch the numbers for them.
Speaker 4: Of the four kids of mine who I've paid for,
Speaker 4: Penn State was the best value.
Speaker 3: It was a relative by well relative to everybody else
Speaker 3: way low, and it's got one of the best engineering schools,
Speaker 3: and the numbnuts got a great job and aerospace engineering
Speaker 3: doing all kinds of crazy stuff.
Speaker 4: So it makes sense to me. I think one of the.
Speaker 3: Parts of the story that's interesting is just generally is
Speaker 3: college in general worth it relative to or also you
Speaker 3: could go maybe go to a trade school and come
Speaker 3: out with little to no debt and still get jobs, and.
Speaker 4: That ROI looks very interesting. I mean, how do you
Speaker 4: guys think about that?
Speaker 10: Yeah, So we actually, like in our story, did look
Speaker 10: at what would the ROI be of someone who graduated
Speaker 10: from high school. So someone making ten dollars an hour
Speaker 10: would have an ROI of about one hundred and ninety
Speaker 10: one thousand dollars ten years after, you know, when normal
Speaker 10: college graduates enroll. And to put that into perspective, the
Speaker 10: average ROI for all colleges was about ninety eight thousand,
Speaker 10: so you can see how you know, initially it might
Speaker 10: seem like beneficial, but that's because when you're going to college,
Speaker 10: you know, you're paying for college, you're putting in that investment.
Speaker 10: But you know, once you graduate, college graduates do tend
Speaker 10: to have higher earnings, so it does balance out in
Speaker 10: the longer term.
Speaker 6: So for ESSCA, help me understand the different buckets that
Speaker 6: you guys looked at and sort of the data that
Speaker 6: you found.
Speaker 9: Yeah, so we wanted to understand what types of schools
Speaker 9: were doing better than others, and so we grouped schools
Speaker 9: by the ivys, which obviously overperformed as they do always,
Speaker 9: and then we looked at private elite institutions, which were
Speaker 9: a group of sixty three schools that are any school
Speaker 9: that you would think of is competitive, selective, think Vasa, Oberlin,
Speaker 9: Wake Forest, those kinds of schools. Then we looked at
Speaker 9: public flagship institutions and other public and elite, other public
Speaker 9: and private schools, and what we found was that after
Speaker 9: you look at the ivys, the private elite institutions and
Speaker 9: the public flagships kind of performed the same at the
Speaker 9: ten year mark. And that was I think our most
Speaker 9: surprising finding because we feel like a lot of people
Speaker 9: put a lot of emphasis on prestige when thinking about college,
Speaker 9: and we're kind of trying to tell them, Wait, maybe
Speaker 9: a public college that accepts most of its applicants can
Speaker 9: give you that same ROI.
Speaker 3: So how about what's the impact I guess or on
Speaker 3: your ROI calculations from what.
Speaker 4: Major you take?
Speaker 6: Yes, that's a good question, you know.
Speaker 4: Engineering, good business? I would think good.
Speaker 6: The same idea is, like, you go to Oberlin, it's
Speaker 6: a liberal arts education, right, like that humanities and psychologip
Speaker 6: play into the math.
Speaker 4: I guess. Yeah.
Speaker 10: So we did tend to find that major place a
Speaker 10: huge role in ROI. Schools where a majority of their
Speaker 10: graduates came from STEM fields tended to overperform well. And
Speaker 10: there are actually some surprise winners. When you look at
Speaker 10: our roy LIFT schools like the Colorado School of Mines,
Speaker 10: the Saint Louis Pharmacy Academy, and many more schools that
Speaker 10: have a STEM focus, we're doing just as well as
Speaker 10: some ivy's, or even better than other ivs as well.
Speaker 6: So what is it? I wonder if what this really
Speaker 6: tells us is that if you major in humanities, your
Speaker 6: ROI stinks, Like is this like what we're learning unless
Speaker 6: you do that in an ivy, because then you have
Speaker 6: the certain types of connections, et cetera, and you may
Speaker 6: get a better job other than that. Do we just
Speaker 6: is that the problem? Francesca's sort of laughing.
Speaker 9: I mean, it's typ a critical of me to say
Speaker 9: I studied visual and media.
Speaker 6: Science, girl, I was a theater director. We're all good.
Speaker 9: But I guess if you just look at the data
Speaker 9: and you're paying a hefty sticker price for college, then yes,
Speaker 9: it's strategically the strategically, the most I guess smart way
Speaker 9: to go about it is to study STEM because these
Speaker 9: jobs put you directly into the labor market and are
Speaker 9: really high paying careers. If you look further down the line,
Speaker 9: these liberal art colleges do tend to gain get better earnings,
Speaker 9: but it's more of a long run than it would
Speaker 9: be if you're like, really want to see those earnings
Speaker 9: right away?
Speaker 4: Please?
Speaker 6: Oh sorry.
Speaker 10: One thing I wanted to know is that with the
Speaker 10: rise of artificial intelligence, there has been a lot of
Speaker 10: discussion about how the critical thinking skills associated with a
Speaker 10: liberal arts degree, you know, might actually be more advantageous
Speaker 10: in the labor market later down the line, but we
Speaker 10: don't know what that is. So this is a snapshot
Speaker 10: of a point in time, probably the last ten years.
Speaker 3: You know, I see you look at like one of
Speaker 3: the schools, the big state schools, the University of Georgia.
Speaker 3: You think about a big school like that, you know,
Speaker 3: one of the events is they have a big alumni network.
Speaker 3: But I mean the state schools in general, how did
Speaker 3: they kind of rank in general? Because there are some
Speaker 3: really really good state schools, whether.
Speaker 4: It's you know, Virginia or Michigan or in those kinds
Speaker 4: of things.
Speaker 9: Yeah, the state schools did really well. I think what's
Speaker 9: driving their ROI to be higher than many elite private
Speaker 9: schools is that they're just cheaper to attend. And at
Speaker 9: the end of the day, like Paulina mentioned at the beginning,
Speaker 9: paying ninety thousand dollars for college is just going to
Speaker 9: set you back in terms of ROI, You're going to
Speaker 9: be uh just it's the earnings are going to take
Speaker 9: longer to level out, and so public schools in this
Speaker 9: instance tend to overperform because of that.
Speaker 10: And one of the sources that we talked to went
Speaker 10: to the University of Georgia and is now working as
Speaker 10: a credit analyst at Blackstone, and one of the things
Speaker 10: that he mentioned was he knew he was someone who
Speaker 10: is ambitious and driven and was going to put the
Speaker 10: work in that he think he had the same outcome
Speaker 10: as people who did go to these elite colleges. So
Speaker 10: sometimes it is it is very individual dependent. If you're
Speaker 10: willing to put in the work and you're really ambitious.
Speaker 6: Right and graduate, Yeah, I flying down. And that just
Speaker 6: makes the point that like if you want humanities like
Speaker 6: maybe sort of the public institutions where you can get
Speaker 6: keeper but also get that humanity education, I'm wondering, and
Speaker 6: you're right, it all like the drive for sure, Like
Speaker 6: that's going to depend. That's why I keep telling my kid,
Speaker 6: like I'm like it's okay, Like great, I know, I know,
Speaker 6: but it's like grades are important, for sure, you got
Speaker 6: to get into a school, but like your ability to
Speaker 6: be a human is also more important. She did draw
Speaker 6: the whole hey do I have to go to college
Speaker 6: thing the other night out of like nowhere, and I
Speaker 6: was like, oh, yeah, you do. That's how you said
Speaker 6: it didn't matter, And I was like, not didn't it
Speaker 6: didn't matter where you went? Are you guys going to
Speaker 6: do this for New York City public versus private schools,
Speaker 6: because I would really appreciate that ROI please.
Speaker 4: Yes, exactly, they're not even they're.
Speaker 9: Not even Dad is available?
Speaker 8: All right?
Speaker 4: What's the what's the biggest surprise that you guys had
Speaker 4: from from your work here?
Speaker 10: The biggest surprise, I think that you know, there's a
Speaker 10: lot of intangible benefits that people think of when going
Speaker 10: to a prestigious school, this alumni network, this idea that
Speaker 10: it'll open doors and help you, you know, climb the
Speaker 10: economic ladder. And I think what was surprising is that
Speaker 10: people felt, even with all that and acknowledging that they
Speaker 10: did get those when they went to the prestigious schools,
Speaker 10: that you know, it's still the cost of that college
Speaker 10: kept them from achieving the things in life that they
Speaker 10: thought really mattered, like being able to start a family,
Speaker 10: owning a home, even being able to buy a car.
Speaker 10: One of the people we spoke with said he his
Speaker 10: student loan payments have been more than his rent and
Speaker 10: have been since he graduated, So I believe it.
Speaker 3: I'm going to have this conversation with my daughter about
Speaker 3: helping out with a home purchase.
Speaker 4: That's kind of Monday.
Speaker 6: Is that coming?
Speaker 4: I think that's money asked me to go to lunch.
Speaker 6: Like priorities change, Like your priority that you're going to
Speaker 6: have when you're eighteen is different when you're thirty.
Speaker 4: Like socialistic thing.
Speaker 6: I love the story. I'm like, all great, thank you
Speaker 6: so much.
Speaker 3: And Duke, so some pretty good schools there, you guys
Speaker 3: feel like it was good worth it?
Speaker 4: Yeah?
Speaker 10: Yeah, yes they did pretty decent ROII so yeah.
Speaker 6: Okay, right, frantask. Thank you very much for Tessca Maglione
Speaker 6: and also Paulina Chicero. Thank you very much. I highly
Speaker 6: recommend that you do private versus public in New York City.
Speaker 6: Thank you, next assignment, good job. You can check out
Speaker 6: that article. It's the big take. Definitely check that out.
Speaker 6: It is definitely worth reading. If you have a kid,
Speaker 6: or any grandkids or anything. It is worth talking about.
Speaker 6: This is Bloomberg.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
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Speaker 2: Say Alexa play Bloomberg eleven thirty.
Speaker 3: Let's talk about the food and beverage business a little bit.
Speaker 3: Constellation Brands, there are fifty billion dollar market cap company
Speaker 3: based in Victor, New York, and they reported some numbers
Speaker 3: here today. So let's break it down with Ken Shay
Speaker 3: Bloomberg Intelligence Senior Consumer products analyst. Ken remind everybody what
Speaker 3: constant relation brands is, what are the big brands that
Speaker 3: they have, and how's business going?
Speaker 8: Yeah, hi, Paul. Well, Constellation Brands is well known for
Speaker 8: its at line of Corona Beers, Nice and increasingly Medello
Speaker 8: part of that family. It also makes Woodbridge Wines, High
Speaker 8: West Whiskey. Pretty much a portfolio of beer, wine and
Speaker 8: spirits brands, but again mostly skewed towards beer.
Speaker 6: So how they do walk us through more stuff?
Speaker 8: So the quarter, you know, I think the backdrop, first
Speaker 8: of all, was for a slow quarter, you know for
Speaker 8: most wine and beer companies right now, and spirits you've
Speaker 8: been given some recent results from Brown, Foreman and Duckcorn portfolio.
Speaker 8: They're a producer of wines. Well they're all saying, you know,
Speaker 8: trade inventory reductions stemming from cooling demand across all alcoholic
Speaker 8: beverages was kind of the backdrop to this earnings report.
Speaker 8: So when it came out, it beat expectations. Beer sales
Speaker 8: were up eleven percent, Whine and spirits were weak. But again,
Speaker 8: this is mostly a beer company, and so that's why
Speaker 8: I was perceived very positively because you know, this was
Speaker 8: a dose of good news and otherwise very cautious market.
Speaker 8: So the company is doing basically what it said it
Speaker 8: would do. You know, it had good results for beer,
Speaker 8: it reduced debt some more, it's committed to expanding its
Speaker 8: big brewery operations down in Mexico, increased the dividend thirteen percent.
Speaker 8: So from a shareholder point of view, they're doing the
Speaker 8: things they said they would do, and the beer results
Speaker 8: beat expectations, and I gave the market a dosa good
Speaker 8: news today.
Speaker 3: Stop getting a fifty two week high today, up about
Speaker 3: ten point six percent year to date, up about nineteen percent.
Speaker 4: Over the past twelve months. What's the growth story here?
Speaker 3: I guess let's go go another way. What's Constellation saying
Speaker 3: about the.
Speaker 4: Consumer in general?
Speaker 3: Because you know, there's a lot of concern out there
Speaker 3: as we look at some of the big data coming
Speaker 3: out of Washington, DC about the consumers, is inflation and
Speaker 3: all that type of stuff.
Speaker 4: What do they sing, Well, they look at the paper.
Speaker 8: Also, they understand, you know, the environment that they're in
Speaker 8: that the consumer has definitely turned a little cautious here
Speaker 8: towards purchases that they can differ. I guess that's the
Speaker 8: best way to put it. You know, beer is you know,
Speaker 8: a roughtively low price point product visa the wine and spirits.
Speaker 8: You know, a high end bottle of wine or high
Speaker 8: end bottle of bourbon you can maybe put off for
Speaker 8: a while, but you know, a bottle of beer or
Speaker 8: even a six pack whatever, you're not as prone to
Speaker 8: do that. Even though Corona Medelic you know, command a
Speaker 8: very premium price. It's a premium product. So they're aware
Speaker 8: that they can't just keep you know, tacking on big
Speaker 8: price increases. They're aware of what's going on, but they
Speaker 8: see the consumer is resilient, particularly for beer right now.
Speaker 6: So Ken, when we get you on, we like to
Speaker 6: talk about all the things, and one of the things
Speaker 6: we like talk about is weed. Because you walk on
Speaker 6: the street in New York City you get the wafting.
Speaker 6: I mean, I think it smells.
Speaker 4: Good right Well, the clar fathers that Ken covers the cannabis,
Speaker 4: it's not that he's right, I.
Speaker 6: Did not frame this correctly. Ken. You're an analyst that
Speaker 6: also covers the cannabis stocks. When I walk around in
Speaker 6: New York City, I smell a lot of cannabis products.
Speaker 6: How are these companies actually doing well?
Speaker 8: Alex are doing pretty well from a sales point of view,
Speaker 8: from an ibada point of view, but you know that
Speaker 8: the taxation on cannabis companies is so onerous and a
Speaker 8: lot of not very many are profitable from a gap
Speaker 8: accounting point of view. So if you're if you're an
Speaker 8: investor in this market, you certainly have to be patient.
Speaker 8: And that's because you need some help from regulators from Washington,
Speaker 8: whether it's a reclassification from you know, a prohibited drug
Speaker 8: like marijuana is considered today, or it's outright legalization in
Speaker 8: some states and so on. So you need some help
Speaker 8: from regulators to keep this thing going. So it's going
Speaker 8: at a mod Sales are from an industry point of view,
Speaker 8: are moving positively. As more states legalized, you know, Florida,
Speaker 8: it's going to be on the bal foarda as they
Speaker 8: could be a you know, a six billion dollars legal market,
Speaker 8: or about three times the size that it is now in
Speaker 8: a very short order if in November voters approve, you know,
Speaker 8: a legalization for adult use in November. So it's moving positively,
Speaker 8: but again from an accounting point of view, you know,
Speaker 8: it's not looking as rosy.
Speaker 4: So what's this.
Speaker 3: You cover a lot of the consumer companies that can
Speaker 3: from the beverage companies to the beer companies and packaged goods.
Speaker 3: What's the sector that's that's doing the best year? Where's
Speaker 3: the most investor interest?
Speaker 4: These days?
Speaker 8: You don't go to a soft drinks, non alcoholic soft drinks,
Speaker 8: Coca Cola, PepsiCo, you know, care Doctor Pepper, Celsius Energy.
Speaker 8: You know, people love their soft drinks and it's a
Speaker 8: very very resilient market. It's doing well, whether it's it's
Speaker 8: a food service or it's you know, take home for
Speaker 8: home consumption doing very well. And that's what the pricing
Speaker 8: power is that you know, you're looking at categories like energy.
Speaker 8: Energy is no longer in an upstart category. It's a
Speaker 8: twenty billion dollar account. It's a big category, right, but
Speaker 8: it's still growing at high single digit rates and it's
Speaker 8: no sign of slowing down. Even the soft drink of
Speaker 8: the carbonated beverages you know, Coke, Pepsi, the products has
Speaker 8: been around a long time. I think they're discovering that
Speaker 8: maybe they were underpriced for a long time because they've
Speaker 8: been taking pricing up for a while. Consumers are not
Speaker 8: bulking at all. As a matter of fact, those mini
Speaker 8: cans have far higher unit prices than the regular size
Speaker 8: and consumers love them.
Speaker 4: I like that.
Speaker 8: So that's an area of particular strength right now.
Speaker 6: Yeah, cans nice and get flat if you don't drink
Speaker 6: the whole thing before, you know, can the non alcoholic
Speaker 6: spirit thing? Does that have real legs? John tuckerdo's anything?
Speaker 6: Only a minute?
Speaker 8: Uh? I think it does, you know to a small audience.
Speaker 8: I mean this is this reminds me of the the
Speaker 8: liquid death water. You know, it's basically spring water and
Speaker 8: it can it's called liquid death. People like to act
Speaker 8: like beer or not act, but they like to be
Speaker 8: social at parties, and you know, it's a certain vibe
Speaker 8: that's given off if you're drinking a bottle of you know,
Speaker 8: plane bottle of water as opposed to something that looks
Speaker 8: cool liquid death, even though it's buying largest same ingredients
Speaker 8: inside so same. It could be suf of non alcoholic
Speaker 8: beverages may make a little joke of this, but I
Speaker 8: think I think younger demographics tend not to imbibe in
Speaker 8: alcohol as much as you know, uh maybe my generation did,
Speaker 8: and I think that's part of the attraction as well.
Speaker 6: All Right, KEM, we gotta leave it there. Thanks a lot,
Speaker 6: Ken Shay, Bloomberg Intelligence, Senior Consumer Products Analyst. I tried
Speaker 6: all that stuff because I don't really drink that much anymore.
Speaker 6: And then I'm like, why I just drink juice and
Speaker 6: all that sugar.
Speaker 2: Anyway, Anyway, this is the Bloomberg Intelligence podcast, available on Apples, Spotify,
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