WEBVTT - Bloomberg Businessweek Weekend - September 6th, 2024 0:00:00.120 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.360 --> 0:00:12.760 This is Bloomberg business Week inside from the reporters and 0:00:12.920 --> 0:00:16.480 editors who bring you America's most trusted business magazine, plus 0:00:16.560 --> 0:00:20.640 global business, finance and tech news. The Bloomberg Business Week 0:00:20.720 --> 0:00:25.640 Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio. 0:00:27.040 --> 0:00:30.720 Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast. 0:00:31.000 --> 0:00:35.000 Well that's it. Summer is officially over, though Carol Masser 0:00:35.120 --> 0:00:38.440 is out taking a nice September vacation. The kids are 0:00:38.479 --> 0:00:40.879 back in school, the leaves are starting to turn, the 0:00:40.920 --> 0:00:44.839 presidential campaigns are in a full sprint until November. The 0:00:44.880 --> 0:00:48.200 August payrolls report has come and gone, and the US 0:00:48.240 --> 0:00:51.680 Open is wrapping up after another exciting two weeks. And 0:00:51.960 --> 0:00:54.680 we were reminded early in the week that September has 0:00:54.720 --> 0:00:58.080 traditionally been a terrible month for traders. Will this September 0:00:58.120 --> 0:01:00.680 prove differently. We're going to have to wait and see. 0:01:00.840 --> 0:01:03.640 We begin, though, with news from the chip space. This week, 0:01:03.680 --> 0:01:07.080 Bloomberg reported that the Department of Justice subpoena chip giant 0:01:07.120 --> 0:01:09.960 in Nvidia over the company's acquisition of run Ai and 0:01:10.040 --> 0:01:13.680 other aspects of its chip business. Nvidia has since said 0:01:13.680 --> 0:01:16.480 that it's been in contact with the Justice Department, but 0:01:16.560 --> 0:01:20.640 has not been subpoenaed. The story still developing in other 0:01:20.760 --> 0:01:24.120 chip news, the Biden Harris Administration's big bet on Intel 0:01:24.280 --> 0:01:27.480 to lead a US chip making renaissance is in grave trouble. 0:01:27.959 --> 0:01:31.039 This as a result of the company's mounting financial struggles. 0:01:31.240 --> 0:01:34.680 It creates a potentially damaging setback for the country's most 0:01:34.720 --> 0:01:38.760 ambitious industrial policy in decades. We're talking about the twenty 0:01:38.800 --> 0:01:41.720 twenty two Chips and Science Act. Under the Act, Intel 0:01:41.840 --> 0:01:43.800 was set to receive eight and a half billion dollars 0:01:43.800 --> 0:01:47.279 in grants and eleven billion dollars in loans, but only 0:01:47.319 --> 0:01:50.440 if the chip maker meets key milestones. For more on 0:01:50.520 --> 0:01:54.320 Intel struggles, Emily GRIFFEO and I turned to Mackenzie Hawkins. 0:01:54.400 --> 0:01:58.040 She's Bloomberg News US Economic and Industrial policy reporter. 0:01:58.480 --> 0:02:02.760 So President Joe Biden to Intel's factory site in Arizona 0:02:02.880 --> 0:02:05.800 in March and announce this massive grant and loan package 0:02:05.800 --> 0:02:07.960 from the Chips ACKed and what could be and would 0:02:07.960 --> 0:02:11.640 be the program's largest award. And Intel, like more than 0:02:11.639 --> 0:02:13.880 a dozen other companies that are supposed to receive US 0:02:13.919 --> 0:02:16.680 government subsidies, is in the middle of a pretty intense 0:02:16.800 --> 0:02:20.160 due diligence process that comes after reaching that preliminary agreement 0:02:20.200 --> 0:02:23.600 earlier this year, and once the company signs a final 0:02:23.720 --> 0:02:26.880 term sheet and hits milestones on each of four projects 0:02:26.919 --> 0:02:29.720 that Intel's Chipsacked award is supposed to support, they could 0:02:29.800 --> 0:02:31.919 start to receive funding from the government in the form 0:02:31.919 --> 0:02:35.720 of a reimbursement for companies spending. But Intel has resisted 0:02:35.800 --> 0:02:39.320 certain due diligence requests from the Biden administration and had 0:02:39.320 --> 0:02:42.520 a pretty disastrous financial report early last month that calls 0:02:42.560 --> 0:02:46.000 into question whether the company will ever be able to 0:02:46.080 --> 0:02:48.359 reach the milestones that would trigger that disbursement in the 0:02:48.360 --> 0:02:48.919 first place. 0:02:49.600 --> 0:02:52.520 So what is the US really looking here when it's 0:02:52.639 --> 0:02:56.560 examining these milestones, Like, what exactly are the milestones that 0:02:56.600 --> 0:02:57.680 Intel has to meet? 0:02:58.200 --> 0:03:01.359 So the government has been actually pretty quiet on the milestones. 0:03:01.360 --> 0:03:04.000 They're very bespoke arrangements that go on not just a 0:03:04.000 --> 0:03:06.880 company by company basis, but a project by project one. 0:03:06.960 --> 0:03:10.359 So in Intel's portfolio, for example, you have everything from 0:03:10.360 --> 0:03:12.680 an R and D facility in organ to a small 0:03:12.720 --> 0:03:15.839 packaging project in New Mexico, and each of those facilities 0:03:15.919 --> 0:03:19.880 have different timelines, different milestones and different portions of Intel's 0:03:19.919 --> 0:03:23.120 grant that would fund those projects. But across the board, 0:03:23.120 --> 0:03:25.600 one of the key metrics for the Biden administration is 0:03:25.760 --> 0:03:28.639 general commercial viability, and the best way for a company 0:03:28.680 --> 0:03:31.720 to demonstrate that is by lining up major customers. So 0:03:31.800 --> 0:03:35.040 if you compare Intel to a company like Taiwan's TSMC, 0:03:35.200 --> 0:03:38.440 which is widely regarded to have the world's best semiconductor 0:03:38.520 --> 0:03:41.760 technology and has orders from pretty much every major tech 0:03:41.840 --> 0:03:44.800 name in the books, Intel doesn't actually have any major 0:03:44.840 --> 0:03:47.480 customers lined up for its US facilities. It has some 0:03:47.560 --> 0:03:51.000 interest from companies including Media Tech, Broadcomm, and Microsoft, but 0:03:51.040 --> 0:03:53.640 none of them have reached full production yet. The Commerce 0:03:53.680 --> 0:03:56.800 Secretary herself actually reached out to executives out in Nvidia 0:03:56.880 --> 0:03:59.840 and AMD and asked them to consider manufacturing it Intel's 0:03:59.840 --> 0:04:02.839 oh Hiho facility, which could become the world's largest chip 0:04:02.840 --> 0:04:06.400 making factory if it's fully built out, and neither company plans. 0:04:06.160 --> 0:04:06.520 To do so. 0:04:07.040 --> 0:04:09.840 Hey mackenzie, how did this story change just in the 0:04:09.920 --> 0:04:13.560 last month. Because of the beginning of August, Intel reported 0:04:13.640 --> 0:04:18.520 earnings and it was the worst single day in decades. 0:04:18.600 --> 0:04:21.680 As you note, two major credit raterers downgraded the firm's 0:04:21.680 --> 0:04:25.080 debt to just a few notches above junk. The chip 0:04:25.080 --> 0:04:28.600 maker also slashing about fifteen thousand jobs. How did this 0:04:28.680 --> 0:04:30.240 story change just in the last month. 0:04:30.480 --> 0:04:32.800 The process that Intel's going through right now, which is 0:04:32.839 --> 0:04:35.799 the preliminary agreement followed by months of due diligence ahead 0:04:35.800 --> 0:04:38.359 of a final award, was always the process that the 0:04:38.360 --> 0:04:41.640 company was going to go through. But of the entire 0:04:41.720 --> 0:04:47.080 chipsack portfolio, which includes companies like TSMC, Samsung, sk Heinex, Micron, 0:04:47.760 --> 0:04:51.200 Intel has perhaps seen the biggest change in the company 0:04:51.240 --> 0:04:54.400 position in the industry from when that preliminary agreement was 0:04:54.400 --> 0:04:56.719 announced to now. And so we're in a bit of 0:04:56.720 --> 0:04:59.800 a holding pattern. The Biden administration and just about everybody 0:04:59.839 --> 0:05:02.080 else else are waiting to see what the company will do, 0:05:02.400 --> 0:05:05.000 and they're set to evaluate options at a mid September 0:05:05.040 --> 0:05:08.479 board meeting. So if the company does something like split 0:05:08.520 --> 0:05:12.320 off its manufacturing division or scale back its global factory plans, 0:05:12.520 --> 0:05:14.640 that could have an impact on its negotiations with the 0:05:14.640 --> 0:05:17.200 Biden administration. And to put a finer point on it, 0:05:17.680 --> 0:05:20.440 if and there is an indication yet that this is happening, 0:05:20.440 --> 0:05:23.279 but if the company does decide to pair back any 0:05:23.320 --> 0:05:26.839 of its US plans specifically that would almost certainly cause 0:05:26.880 --> 0:05:28.720 a reduction in its overall chipsack. 0:05:28.400 --> 0:05:32.080 Toward I'm wondering if maybe we can zoom out, just 0:05:32.240 --> 0:05:35.839 for people who are just tuning in now, why has 0:05:35.960 --> 0:05:40.359 Intel not been able to kind of capture that frenzy 0:05:40.400 --> 0:05:44.240 that there is, at least in the market for semiconductors, 0:05:45.080 --> 0:05:47.120 you know in videas the top performing stock in the 0:05:47.160 --> 0:05:48.960 S and P five hundred. It's been a huge theme 0:05:49.000 --> 0:05:51.560 this year, and yet we have Intel, which is a 0:05:51.839 --> 0:05:54.640 very well known name, and it just hasn't been able 0:05:54.920 --> 0:05:57.320 to ride that wave. The stock is down something like 0:05:57.400 --> 0:06:00.479 sixty percent year to date. Just get us up to 0:06:00.560 --> 0:06:03.039 speed on exactly what they're missing. 0:06:03.480 --> 0:06:06.800 So you know, Intel is an American technological giant. This 0:06:06.920 --> 0:06:09.680 is the company that gave Silicon Valley its name, but 0:06:09.960 --> 0:06:13.320 there have been several years of strategic and technological blunders. 0:06:13.360 --> 0:06:17.000 That CEO Pat Gelsinger came into leadership of the company 0:06:17.040 --> 0:06:19.919 aiming to turn around with a massive bet on Intel's 0:06:19.920 --> 0:06:23.359 factory division for factories that are known as foundries in 0:06:23.560 --> 0:06:26.720 chips peak. But the foundry business has struggled. They posted 0:06:26.720 --> 0:06:29.919 a seven billion dollar loss last year and they missed 0:06:29.960 --> 0:06:33.040 out on a big AI wave that companies like TSMC 0:06:33.080 --> 0:06:35.839 have been able to ride, and so now Intel is 0:06:35.960 --> 0:06:39.160 sort of playing catch up against foreign competitors and their 0:06:39.200 --> 0:06:43.680 technology still lags several generations behind the cutting edge, and 0:06:43.720 --> 0:06:47.279 they've struggled to convince major other players in the industry, 0:06:47.520 --> 0:06:50.200 who get the bulk of their orders for AI chips 0:06:50.240 --> 0:06:53.279 from the industry leader TSMC, to take a bet on 0:06:53.320 --> 0:06:56.240 their factory processes. So it's a bit of a spiral 0:06:56.279 --> 0:06:59.400 for Intel right now as they're trying to convince investors, 0:06:59.440 --> 0:07:02.720 convince the gu government, and convince industry that their technology 0:07:02.760 --> 0:07:03.719 is worth taking a bet on. 0:07:04.080 --> 0:07:06.440 McKenzie on the US side of this, the US government 0:07:06.520 --> 0:07:08.719 side of this, the support that Intel was set to 0:07:08.720 --> 0:07:10.960 get from the US government is set to get from 0:07:11.000 --> 0:07:14.040 the US government. What does the US government want to see? 0:07:14.120 --> 0:07:16.960 Is this about jobs? Is about security? Is it about both? 0:07:17.320 --> 0:07:19.720 So if we go thirty thousand foot and look at 0:07:19.760 --> 0:07:23.000 the Chips Act overall, this was a landmark law that 0:07:23.160 --> 0:07:26.520 was that President Joe Biden signed just about two years ago, 0:07:26.600 --> 0:07:29.680 two years ago last month, and the goal is basically 0:07:29.800 --> 0:07:33.400 to bring manufacturing of these critical electronic components back to 0:07:33.440 --> 0:07:36.040 the US chips are in everything you could think of, 0:07:36.120 --> 0:07:39.000 from a microwave to a phone to a nuclear missile, 0:07:39.440 --> 0:07:43.680 and for decades the US has ceded manufacturing leadership to Asia. 0:07:44.320 --> 0:07:47.720 The pandemic revealed to everybody how important ships are. You know, 0:07:47.760 --> 0:07:50.480 it was a shortage of even less advanced ships that 0:07:51.040 --> 0:07:54.760 caused auto supply lines to shut down during COVID and 0:07:54.880 --> 0:07:57.720 governments around the world, not just the US, but from 0:07:57.840 --> 0:08:00.560 the EU to South Korea, to Japan to Taiwan too. 0:08:00.600 --> 0:08:03.720 Of course, China has decades of industrial policy in this area. 0:08:04.480 --> 0:08:06.680 Are really doubling down and trying to make sure that 0:08:06.720 --> 0:08:10.400 they have a stable and secure domestic manufacturing base for 0:08:10.480 --> 0:08:14.440 both economic and national security. The jobs, of course, are 0:08:14.480 --> 0:08:17.080 an added bonus, but this isn't a jobs program. The 0:08:17.120 --> 0:08:19.760 goal is to get the world's top chip makers, and 0:08:19.800 --> 0:08:23.040 the US has gotten commitments from all of them, including Intel, 0:08:23.520 --> 0:08:27.000 to build significant manufacturing presence on US soil so that 0:08:27.080 --> 0:08:28.920 the country can make a fifth of the world's most 0:08:28.920 --> 0:08:30.360 advanced processors by the end. 0:08:30.240 --> 0:08:30.840 Of the decade. 0:08:30.880 --> 0:08:32.920 But you say, you write your piece that this is 0:08:32.960 --> 0:08:34.600 a long process. I mean you go back to the 0:08:34.640 --> 0:08:37.800 Obama administration and Intel was talking with the Obama administration 0:08:38.120 --> 0:08:40.640 for something that they ended up building and touting during 0:08:40.679 --> 0:08:41.880 the Trump administration. 0:08:42.280 --> 0:08:45.240 That's right, and you know, one of the big difficulties 0:08:45.320 --> 0:08:47.920 facing the Biden administration is, you know, they're looking at 0:08:47.960 --> 0:08:51.000 point in time company financials and market conditions. But this 0:08:51.120 --> 0:08:55.079 is an intensely cyclical industry. And as much as companies 0:08:55.120 --> 0:08:57.760 would like to make promises to politicians, you know, they'd 0:08:57.760 --> 0:09:00.640 love to stand with Biden at a build signing or 0:09:00.640 --> 0:09:03.040 go to the Oval Office, the reality is that they're 0:09:03.040 --> 0:09:05.760 beholden to their shareholders and to their customers. And so 0:09:05.840 --> 0:09:08.200 you have a strategy employed not just by Intel but 0:09:08.240 --> 0:09:11.760 by other major companies as well, to build factory shells, 0:09:12.240 --> 0:09:14.560 do what has cost billions of dollars but is actually 0:09:14.559 --> 0:09:17.280 the cheap part of the process, and only outfit them 0:09:17.320 --> 0:09:20.760 with actual equipment when they can see, you know, six 0:09:20.800 --> 0:09:23.000 months down the line, nine months down the line, exactly 0:09:23.000 --> 0:09:25.560 what their demand picture is going to look like. And 0:09:25.640 --> 0:09:27.920 so right now you're starting to see a lot of 0:09:27.920 --> 0:09:29.880 the signs that you would want to see if the 0:09:29.920 --> 0:09:32.600 country were going to meet it's, you know, a decade 0:09:32.720 --> 0:09:34.959 end goal of making all of these chips at home, 0:09:35.760 --> 0:09:39.160 but that's in factory construction not in actual equipment purchases, 0:09:39.200 --> 0:09:40.960 and so there are a lot of other indicators to 0:09:41.000 --> 0:09:44.000 watch to see whether companies will actually make good on 0:09:44.200 --> 0:09:47.160 their production plans in the timelines that they have set 0:09:47.160 --> 0:09:48.199 out with the administration. 0:09:48.520 --> 0:09:50.600 I wanted to talk about that timeline. What do we 0:09:50.720 --> 0:09:54.280 know about what's next for Intel and how much time 0:09:54.320 --> 0:09:56.680 they do have before they would be set to receive 0:09:56.960 --> 0:09:58.520 those billions of dollars in grants. 0:09:58.920 --> 0:10:02.120 Intel would love to the answer to that question very 0:10:02.160 --> 0:10:06.120 active negotiation. You know, there are companies that are quite close, 0:10:06.200 --> 0:10:08.719 but we haven't actually seen any chips sacked money go 0:10:08.800 --> 0:10:11.120 out the door. All of the announcements, of which there 0:10:11.120 --> 0:10:13.720 are more than thirty billion dollars committed, have been in 0:10:13.720 --> 0:10:16.040 the form of these preliminary agreements like the one that 0:10:16.080 --> 0:10:19.160 I described Biden announcing for Intel in March, and so 0:10:19.280 --> 0:10:22.679 all of the companies are going through due diligence, actively 0:10:22.720 --> 0:10:25.840 hashing out the specific dollars and cents that are correlated 0:10:25.920 --> 0:10:30.400 with you know, X production milestone, X customer commitment, and 0:10:30.800 --> 0:10:33.439 it's you know, a very company by company basis, and 0:10:33.559 --> 0:10:36.600 so really what Intel is feeling right now is not 0:10:36.640 --> 0:10:38.920 necessarily like, oh, we're worried our chips ACKed award is 0:10:38.960 --> 0:10:41.800 going away. That would only happen if their US factories 0:10:41.840 --> 0:10:44.760 went away, and intil hasn't made any decision to that effect. 0:10:45.120 --> 0:10:48.400 But it's about the timing. Intel has a balance sheet 0:10:48.440 --> 0:10:50.600 that's in pretty dire strait and they want to get 0:10:50.600 --> 0:10:53.520 this money as quickly as possible. But that'll only happen 0:10:53.679 --> 0:10:56.880 if they cooperate with due diligence. They have resisted some 0:10:56.920 --> 0:10:59.760 requests from the Biden administration so far, and of course 0:10:59.760 --> 0:11:02.000 if the actually get their factories off the ground, which 0:11:02.040 --> 0:11:04.600 requires the company to invest billions of dollars itself. 0:11:04.960 --> 0:11:09.240 To what extent does the US government need Intel to succeed? 0:11:09.720 --> 0:11:11.760 I'm not asking if it's like too big to fail, 0:11:11.840 --> 0:11:13.360 but is it too important to fail? 0:11:14.080 --> 0:11:17.280 Intel's crucial to the overall Chips Act effort. There are 0:11:17.320 --> 0:11:20.719 only three companies that make the types of advanced processors 0:11:20.760 --> 0:11:23.240 that the US is really really focused on in this effort, 0:11:23.280 --> 0:11:26.800 and that's Intel, Samsung, and TSMC, And both of the 0:11:26.880 --> 0:11:30.280 latter companies are building factories on US soil. But to 0:11:30.320 --> 0:11:33.280 get to a fifth of the world's production, especially when 0:11:33.320 --> 0:11:36.160 governments around the globe are trying to do the same thing, 0:11:36.600 --> 0:11:39.320 you really need these large scale commitments like the ones 0:11:39.320 --> 0:11:42.320 that Intel is making. I mean they're planning multiple fabs 0:11:42.360 --> 0:11:46.160 in Ohio and multiple fab expansions in Arizona. So to 0:11:46.360 --> 0:11:49.000 potentially lose those projects or to see them delayed, which 0:11:49.000 --> 0:11:50.960 again we don't really know what's going to happen on 0:11:51.000 --> 0:11:53.280 that front, would be a pretty massive blow to the 0:11:53.320 --> 0:11:56.880 overall ambition of the program. Intel's also the only American 0:11:56.920 --> 0:11:59.720 maker of these chips, which the Pentagon has decided as 0:11:59.760 --> 0:12:02.800 really crucial for Department of Defense supply chains, and Intel's 0:12:02.840 --> 0:12:05.600 the sole intended beneficiary of a three and a half 0:12:05.640 --> 0:12:08.840 billion dollar program to stand up a secure facility to 0:12:08.920 --> 0:12:12.280 make semiconductors for military and intelligence purposes. 0:12:12.760 --> 0:12:13.400 So will the. 0:12:13.360 --> 0:12:16.800 Ships Act fail if Intel fails? No, there are hundreds 0:12:16.840 --> 0:12:19.000 of companies that were interested in the money. More than 0:12:19.040 --> 0:12:22.960 a dozen awards have already been announced. But it's impossible 0:12:22.960 --> 0:12:26.680 to overstate how critical Intel's investments are to not just 0:12:26.720 --> 0:12:30.360 the company's turnaround plan, but also the Biben administration's goals. 0:12:30.480 --> 0:12:34.160 Mackenzie Hawkins, Bloomberg News US Economic and Industrial Policy reporter. 0:12:35.000 --> 0:12:38.559 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:38.559 --> 0:12:41.840 Live weekday afternoons from two to five pm Eastern Listen 0:12:41.840 --> 0:12:44.000 on Apple, card Play and and Broud Auto with a 0:12:44.040 --> 0:12:47.760 Bloomberg business act or want us live on YouTube. 0:12:48.679 --> 0:12:51.480 The US Open wrapping up in New York City this weekend, 0:12:51.800 --> 0:12:54.800 and this year the Grand Slam saw a record breaking attendance, 0:12:55.000 --> 0:12:57.800 cementing itself as a can't miss summer event for not 0:12:57.840 --> 0:13:02.600 only the casual fan, but celebrity influencers, well connected New Yorkers, 0:13:02.640 --> 0:13:05.520 some titans of finance, some of them there to watch 0:13:05.559 --> 0:13:09.880 incredible tennis, some there to see and be seeing. It's 0:13:09.880 --> 0:13:12.240 also perhaps my favorite sporting event of the year because 0:13:12.520 --> 0:13:14.880 not only do Carol and I get to take in 0:13:14.920 --> 0:13:17.559 the festivities and watch some of the sports American stars 0:13:17.600 --> 0:13:20.920 like Francis Tiaffo, Coco Goff, and Taylor Fritz, but we 0:13:21.080 --> 0:13:23.680 also have a chance to speak with someone who understands 0:13:23.679 --> 0:13:27.000 tennis elite athletes in the world of sports like pretty 0:13:27.040 --> 0:13:30.319 much nobody else. John Wertheim is executive editor and senior 0:13:30.360 --> 0:13:33.319 writer at Sports Illustrated and correspondent for The Tennis Channel. 0:13:33.600 --> 0:13:35.280 He joined us at the US Open. 0:13:35.480 --> 0:13:38.280 You know, Kennis, that's this weird point where Roger Feeder 0:13:38.320 --> 0:13:42.160 is retired Titan player, everyone loved him. Not here, Florida 0:13:42.240 --> 0:13:44.760 Williams Titan not here, Rolf and the Doll not here. 0:13:45.120 --> 0:13:48.400 And I think everybody worried, Oh man, after these legends retire, 0:13:48.440 --> 0:13:50.200 what does tennis look like? Is anyone going to care 0:13:50.240 --> 0:13:54.439 about the sport? And we've kind of made uncharacteristically great, 0:13:54.640 --> 0:13:58.000 you know, graceful pivot for tennis, and the grounds are 0:13:58.120 --> 0:14:01.160 more filful than ever. The the attendance is through the roof. 0:14:01.160 --> 0:14:03.400 It's going to set a record, and it's kind of 0:14:03.440 --> 0:14:06.439 strange because we have this deficit of stars compared to 0:14:06.480 --> 0:14:08.240 what we used to have. So that's that's a story 0:14:08.400 --> 0:14:08.959 I'm looking at. 0:14:09.080 --> 0:14:11.480 So do we have the deficit of stars or are 0:14:12.640 --> 0:14:15.640 is Cocoa Goff going to be there? Is Shelton going 0:14:15.720 --> 0:14:17.480 to be there? Is Alcoraz there? 0:14:18.880 --> 0:14:22.800 I mean Alcarez could have been there? Yeah, a last 0:14:22.840 --> 0:14:24.880 he's not in the tournament. Yeah, I mean, I think 0:14:24.880 --> 0:14:27.440 they're bright prospects. I think they're fans that they're players 0:14:27.440 --> 0:14:29.360 that fans are starting to build relationships with. But you know, 0:14:29.360 --> 0:14:32.320 we're not talking about guys, you know, twenty majors. Yeah, 0:14:32.480 --> 0:14:35.920 Coco Gov's wonderful, but just one And I kind of 0:14:35.920 --> 0:14:39.920 feel like fans kind of like the unpredictability of it all, 0:14:40.120 --> 0:14:43.480 and they don't mind that any of twenty players could win. 0:14:43.560 --> 0:14:47.320 And they don't mind that Carlos Alcaraz wins two tournaments 0:14:47.320 --> 0:14:48.720 and then loses in the second round here. 0:14:48.600 --> 0:14:50.160 So in a sense, is that better for the sport? 0:14:50.440 --> 0:14:52.320 It's funny because I think the conventional wisdom is you 0:14:52.320 --> 0:14:54.440 sort of need excellence to the top. But the NFL, 0:14:54.680 --> 0:14:57.360 which is the most successful sports league certainly in the US, 0:14:57.360 --> 0:15:00.000 how's this any given Sunday theory and parody is great? 0:15:00.160 --> 0:15:02.320 Did we want all fans to think their team could 0:15:02.320 --> 0:15:04.520 get to the Super Bowl? It's kind of worked out 0:15:04.520 --> 0:15:06.520 for them. And I think tennis is sort of pleasantly 0:15:06.520 --> 0:15:09.520 surprised how well things are going in the absence of stars. 0:15:09.640 --> 0:15:10.680 Why do you think it is that way? 0:15:10.840 --> 0:15:12.600 You know, We've been talking with various folks from the 0:15:12.680 --> 0:15:16.400 USTA and they talk about the Zendaya movie Challengers and 0:15:16.440 --> 0:15:19.320 how much money it made, and you're rolling your eyes. 0:15:19.960 --> 0:15:26.000 I didn't see it. Actually, Ida's Sandaya's rate is quite high, 0:15:26.040 --> 0:15:28.200 so I don't know, you know how much it I made, 0:15:28.240 --> 0:15:30.160 But no, I think you're I think tennis is having 0:15:30.160 --> 0:15:32.440 a bit of a moment, and I think instead of 0:15:32.480 --> 0:15:35.960 tethering itself to these stars Torena, Williams, Rogers, Cetter, Rofindo, 0:15:36.080 --> 0:15:38.520 I mean, it's kind of it's about the culture, it's 0:15:38.560 --> 0:15:41.760 about the fashion, it's about the the international aspects. I 0:15:41.800 --> 0:15:44.120 mean I think some of it too is just you 0:15:44.200 --> 0:15:46.040 and I could be playing and it would still be 0:15:46.040 --> 0:15:47.520 fun to come to the US Open and watch the 0:15:47.560 --> 0:15:50.360 tennis match. Yeah, I mean this is such a big event. 0:15:50.520 --> 0:15:52.520 It's almost sort of actually. 0:15:52.320 --> 0:15:55.000 John and if I was playing, No, it wouldn't. 0:15:54.640 --> 0:15:57.240 Be if they would have honey deuces and they would 0:15:57.320 --> 0:15:59.840 have music, and it's I mean it's almost sort of 0:16:00.040 --> 0:16:02.680 they're not player dependent here the way they used to be. No, 0:16:02.760 --> 0:16:05.760 I think there's a lot to recommend about tennis. I 0:16:05.760 --> 0:16:08.560 mean I have pet theories about I think I think 0:16:08.600 --> 0:16:11.120 pickleball maybe a bit of a help that all millions, 0:16:11.160 --> 0:16:13.440 millions of people are now sort of understanding what it 0:16:13.480 --> 0:16:16.080 means to hit a slice, or they have a more 0:16:16.080 --> 0:16:19.120 appreciation for tennis because they've been bopping around a wiffle 0:16:19.160 --> 0:16:20.360 ball in their in their yards. 0:16:20.440 --> 0:16:22.720 Yeah, it's been it's been really awesome to watch and 0:16:22.840 --> 0:16:24.680 least be able to cover it over the last few years, 0:16:24.720 --> 0:16:26.840 and even in those that little bit of times, see 0:16:26.840 --> 0:16:27.280 the growth. 0:16:27.520 --> 0:16:28.760 How many opens have you covered? 0:16:28.880 --> 0:16:31.000 I'm not trying, You're doing so well, and now you've 0:16:31.040 --> 0:16:34.680 kind of it's really depressing a lot. I mean, like 0:16:35.040 --> 0:16:35.960 since the nineties. 0:16:36.160 --> 0:16:39.240 Remember the nineties, remember it was, but that was a 0:16:39.240 --> 0:16:41.240 really important era for American men's tennis. 0:16:41.720 --> 0:16:44.560 Yeah, I mean I sort of caught the very very 0:16:44.600 --> 0:16:46.920 tail end of sampress agacy, and then I sort of 0:16:46.960 --> 0:16:49.440 came up, you know, I came up with like mack and. 0:16:49.480 --> 0:16:51.720 Roe and Connor's before, and they all looked at me 0:16:51.800 --> 0:16:52.680 like I was eve I. 0:16:54.320 --> 0:16:57.480 Nineties. Yeah exactly, Oh sorry, go ahead. No, It's just 0:16:57.480 --> 0:16:59.840 funny because the game sort of takes on different identities 0:16:59.840 --> 0:17:02.680 and and it was it was tampras Agasy, and then 0:17:02.720 --> 0:17:04.520 you had the Williams sisters and you sort of had 0:17:04.520 --> 0:17:07.040 this international. I mean, I was here when Andy Ronick 0:17:07.080 --> 0:17:09.440 won and you said, oh, there's this fresh American champion 0:17:09.520 --> 0:17:13.080 and then here comes Roger feder Rofnadal and Novak Djokovic 0:17:13.119 --> 0:17:16.000 that basically ate everyone else lunch for twenty years. 0:17:16.400 --> 0:17:17.320 Look how far we've come. 0:17:17.440 --> 0:17:19.520 So look how far we've But you knew exactly think 0:17:19.520 --> 0:17:19.879 about that. 0:17:19.920 --> 0:17:20.840 Just coming off the Olympics. 0:17:20.920 --> 0:17:22.760 I was a gymnast as a young kid, and I 0:17:22.800 --> 0:17:26.760 mean to look at Simone Biles, right, and normally you 0:17:26.840 --> 0:17:29.960 have a good season, maybe you're really young, but look 0:17:29.960 --> 0:17:32.040 at like I just think there's is there something happening 0:17:32.080 --> 0:17:34.720 in sports where yeah, people can go the distance. 0:17:34.400 --> 0:17:34.840 And why not? 0:17:35.400 --> 0:17:37.280 I have two theories. You want to real quick that 0:17:37.400 --> 0:17:40.399 One of them is just it's evolution, it's sports science. 0:17:40.400 --> 0:17:43.040 I also think it appropriate for a Bloomberg audience. Tom Brady, 0:17:43.240 --> 0:17:46.000 it's commerce, it's money, it's I mean these players have 0:17:46.080 --> 0:17:47.840 I mean, you know, Billy Jean King used to come 0:17:47.840 --> 0:17:49.800 in the back of a station wagon. Now you've got players, 0:17:49.840 --> 0:17:52.159 They've got their own messuses, they've got their own teams. 0:17:52.160 --> 0:17:54.760 They're not standing in line waiting for the Hurts rental 0:17:54.800 --> 0:17:55.480 car counter to. 0:17:55.760 --> 0:17:57.760 Oh, they're getting private judge, I think exactly. 0:17:57.760 --> 0:17:59.640 And I think that has the extensions a. 0:17:59.600 --> 0:18:02.600 Career hardly because they have deals with private jet companies. 0:18:02.600 --> 0:18:04.600 Well that too. It doesn't doesn't hurt when you have 0:18:04.640 --> 0:18:05.240 that endorsement. 0:18:05.240 --> 0:18:07.200 But if they didn't play well, I mean they're playing 0:18:07.240 --> 0:18:08.080 well though. 0:18:08.080 --> 0:18:10.679 They can avail themselves to all the cold plunges and 0:18:10.720 --> 0:18:13.000 the trainers and the physios, and I mean all is 0:18:13.040 --> 0:18:15.760 Tom Brady similar? And I think Lebron James is still 0:18:15.800 --> 0:18:18.119 going strong and yeah, twenty years into this career, and 0:18:18.160 --> 0:18:21.320 I think it's because they can afford career Extenis this one's. 0:18:21.160 --> 0:18:22.200 Done a cold plunge by the. 0:18:22.119 --> 0:18:25.239 Way, Yeah, very popular, They're very popular. I I mean, 0:18:25.280 --> 0:18:28.479 who knows it to scientists, But this might be a 0:18:28.520 --> 0:18:32.240 good time to talk doping, might be all right, what's 0:18:32.280 --> 0:18:32.640 the deal? 0:18:34.280 --> 0:18:37.800 I don't in this sport. I mean, I you want 0:18:37.840 --> 0:18:40.960 my honest opinion. I believe. I believe that incentives explained 0:18:40.960 --> 0:18:44.280 an awful lot of human behavior. And I get why 0:18:44.320 --> 0:18:47.439 some athletes will dope. I get why some athletes who 0:18:47.560 --> 0:18:51.040 might be trying to, you know, have this career resurgence 0:18:51.119 --> 0:18:53.080 laid in their career with dope. I can see how 0:18:53.119 --> 0:18:56.119 young athletes. I just I don't think. I mean, obviously 0:18:56.280 --> 0:18:59.119 we're we're talking about Jon Excenter and everyone given a 0:18:59.160 --> 0:19:01.600 tournament and we have this sort of strange story where 0:19:01.600 --> 0:19:04.800 he had failed to doping tests from about five months ago, 0:19:04.840 --> 0:19:08.320 but was essentially exonerated and found no negligence, no fault 0:19:08.400 --> 0:19:13.000 because the trainer essentially was careless and use the substance 0:19:13.000 --> 0:19:14.800 that was legal in Italy but is not is on 0:19:14.840 --> 0:19:18.440 the bad list, And I just I get the skepticism. 0:19:18.640 --> 0:19:21.480 I understand sort of. There are a lot of players 0:19:21.520 --> 0:19:24.639 who are very suspicious about this. I just i'm I 0:19:24.640 --> 0:19:28.240 always look at incentives. Why would a guy with one 0:19:28.320 --> 0:19:30.919