WEBVTT - Bloomberg Businessweek Weekend-July 11, 2020 0:00:00.960 --> 0:00:04.440 This is Bloomberg Business Week with Carol Masser and Jason 0:00:04.600 --> 0:00:08.480 Kelly from Bloomberg Radio. Hi. I'm Jason Kelly and I'm 0:00:08.520 --> 0:00:11.600 Carol Masser. Welcome to the weekend edition of Bloomberg Business Week. 0:00:11.680 --> 0:00:13.560 Over the next couple of hours, Jason, we're gonna bring 0:00:13.560 --> 0:00:16.279 everybody news of the week, insights from the magazine, and 0:00:16.320 --> 0:00:18.720 a lot more A week of more woes in the 0:00:18.760 --> 0:00:21.160 retail sector. There was a lot going on, a lot 0:00:21.200 --> 0:00:23.840 of problems, uh. And we also talked about US virus 0:00:23.880 --> 0:00:26.040 cases jumping the most in a few months. We talked 0:00:26.040 --> 0:00:30.520 about school reopening, school athletic programs not so fast, and 0:00:30.560 --> 0:00:32.920 I do feel like the world is gearing up to 0:00:33.000 --> 0:00:35.280 find out what's going to happen in the second half, 0:00:35.280 --> 0:00:38.720 because second quarter earning season just around the corner. Well, 0:00:38.760 --> 0:00:40.199 I think that's exactly right, And I want to pick 0:00:40.240 --> 0:00:42.120 up on something you just said. It feels like if 0:00:42.159 --> 0:00:44.000 there was a theme for the week, it was not 0:00:44.080 --> 0:00:47.519 so fast. You know that that basically this reopening that 0:00:47.560 --> 0:00:51.320 we've all been so focused on and looking forward to, 0:00:52.040 --> 0:00:54.600 certainly here in the Tri State area, where as you say, 0:00:54.640 --> 0:00:57.680 we've been locked down at home for seventeen weeks the 0:00:57.720 --> 0:01:00.320 rest of the country, it feels like has dealt with 0:01:00.360 --> 0:01:03.280 this in a different way, and I think we're really 0:01:03.280 --> 0:01:06.400 seeing evidence of that, and that is playing out, whether 0:01:06.520 --> 0:01:09.479 you look at the IVY League canceling fall sports, whether 0:01:09.520 --> 0:01:13.120 you look at restaurants not opening for indoor dining the 0:01:13.120 --> 0:01:15.839 way that they had planned to, a lot of things 0:01:15.920 --> 0:01:19.040 now just slowing down a little bit. Yeah, exactly right. 0:01:19.080 --> 0:01:20.880 And we've felt this before. I feel like over the 0:01:20.959 --> 0:01:22.920 last month or so, where we make some progress, but 0:01:22.959 --> 0:01:25.399 then we have to kind of slow down and really 0:01:25.440 --> 0:01:28.960 assess what the reality is of our situation. So a 0:01:28.959 --> 0:01:31.000 lot to talk about over the next couple of hours. 0:01:31.160 --> 0:01:34.199 And let's not forget this week. It's our annual heist issue. 0:01:34.319 --> 0:01:36.320 It's still on news stands, it's on the Bloomberg and 0:01:36.440 --> 0:01:39.080 Bloomberg dot com and Jason, we know there's some really 0:01:39.080 --> 0:01:42.320 cool stories about stolen Super Bowl rings and also the 0:01:42.360 --> 0:01:46.559 most famous art heist in modern history. Great summer reads. 0:01:46.800 --> 0:01:48.600 And here on the show this week, we're gonna have 0:01:48.600 --> 0:01:51.400 a conversation later on this hour with chef and restaurant 0:01:51.400 --> 0:01:55.200 tour Daniel blue Back with us Carol. He talked about 0:01:55.240 --> 0:01:58.440 the early days of the pandemic now he's adapting to 0:01:58.800 --> 0:02:02.880 the new reality every day. We tried to really bring 0:02:02.920 --> 0:02:05.680 a little bit more improvement and also a little bit 0:02:05.720 --> 0:02:08.720 more hope to our businesses. Restaurants, Jason, we now have 0:02:08.800 --> 0:02:11.640 had a really tough time, so too has retail, and 0:02:11.680 --> 0:02:14.440 there were a lot of headlines on the retail world 0:02:14.680 --> 0:02:17.560 this week alone. We caught up with Alan Ellinger. He 0:02:17.720 --> 0:02:20.160 is co founder senior managing partner of the investment bank 0:02:20.280 --> 0:02:23.960 MMG Advisors. He has been consulting on deals looking at 0:02:23.960 --> 0:02:27.120 some of those distressed assets, so a great conversation with him. 0:02:27.160 --> 0:02:30.760 A lot of distress. Also add Facebook of a different kind, Carol, 0:02:30.840 --> 0:02:34.280 dealing with issues of social justice and a massive boycott. 0:02:34.320 --> 0:02:37.239 We caught up with Amber Atherton. She's the CEO of Ziper. 0:02:37.600 --> 0:02:40.360 She had some pretty strong words to say about where 0:02:40.440 --> 0:02:44.680 Facebook is. But first, imagine taking five antibody tests just 0:02:44.760 --> 0:02:48.760 to get results you could believe in. That's what Bloomberg's 0:02:48.840 --> 0:02:52.200 senior writer at Stephanie Baker did. Let's start with that interview. 0:02:52.320 --> 0:02:56.040 A couple of months ago. I took four antibody tests 0:02:56.040 --> 0:02:59.400 of finger prick antibody tests that were on the market 0:02:59.440 --> 0:03:01.920 at the time and that many people had questioned their 0:03:01.919 --> 0:03:05.680 reliability UM, and I got conflicting results. I got two 0:03:05.720 --> 0:03:08.399 positives and two negatives and sort of gave up, even 0:03:08.400 --> 0:03:10.840 though I had cross checked them with various other doctors 0:03:10.840 --> 0:03:13.480 and nurses who had tested positive for COVID. So has 0:03:13.600 --> 0:03:17.400 left a bit confused about my status. When some of 0:03:17.400 --> 0:03:20.240 the newer tests came out that are based on an 0:03:20.280 --> 0:03:24.720 intravenous blood draw, they appear to be more accurate and 0:03:24.760 --> 0:03:28.200 more sensitive. H So I finally got around to taking 0:03:28.560 --> 0:03:31.480 one of these tests, the Abbot tests, which is does 0:03:31.560 --> 0:03:35.200 have some pretty good data behind it, and I wasn't depositive, 0:03:35.720 --> 0:03:37.920 and I was somewhat relieved that I figured I have 0:03:38.080 --> 0:03:41.160 three positives versus two negatives, and one of the positives 0:03:41.200 --> 0:03:43.560 seems to be more reliable and has some pretty hard 0:03:43.640 --> 0:03:46.800 science behind it. Having studied this, Stephanie, I have to 0:03:46.840 --> 0:03:50.360 ask you, why is this so hard? I I agree 0:03:50.680 --> 0:03:52.800 it shouldn't be this hard, and I think it's hard 0:03:52.880 --> 0:03:57.800 because we are still learning so much about this virus UM. 0:03:57.840 --> 0:03:59.520 You know, I think some of the tests were trying 0:03:59.560 --> 0:04:01.920 to figure out what is the best way to go 0:04:02.000 --> 0:04:07.080 about UM, you know, finding the most effective antibodies, you know, 0:04:07.320 --> 0:04:09.920 is it against the spike protein or is against the 0:04:10.000 --> 0:04:13.600 nucleo capsid, which is another kind of antibody that the 0:04:13.880 --> 0:04:17.440 COVID nineteen generates. UM And I think there was a 0:04:17.480 --> 0:04:19.960 lot of time wasted on these finger proc tests, which 0:04:19.960 --> 0:04:22.279 some of them can be good and reliable, but they're 0:04:22.320 --> 0:04:25.919 just not as sensitive as the intravenous blood draw. The 0:04:25.960 --> 0:04:29.000 blood draw is a hard thing to roll out on 0:04:29.040 --> 0:04:34.400 a mass scale. It's more expensive, it's more time consuming, um, 0:04:34.440 --> 0:04:36.760 you know, but the data seems to indicate that this 0:04:37.040 --> 0:04:39.560 is the better approach. We still don't know what it 0:04:39.640 --> 0:04:42.240 means to have antibodies, and I think that's the biggest problem. 0:04:42.520 --> 0:04:45.920 There's indications that it does provide some protection, we don't 0:04:45.920 --> 0:04:49.000 know how long that lasts UM And I think that's 0:04:49.040 --> 0:04:52.479 the real question mark over these tests. What is it 0:04:52.520 --> 0:04:54.720 What does it really mean to be positive. That's such 0:04:54.720 --> 0:04:56.599 a good point because I think Stephanie, when we first 0:04:56.720 --> 0:04:58.919 started talking about the antibody tests, were like, Okay, this 0:04:58.960 --> 0:05:00.640 is the holy grail. We're going to find out if 0:05:00.680 --> 0:05:02.839 you had it and then you're okay, and then you've 0:05:02.839 --> 0:05:04.840 got some immunity and go back out into the world. 0:05:05.080 --> 0:05:07.880 And now we're realizing it's not so easy, And I 0:05:07.880 --> 0:05:11.160 do wonder how did it kind of change your psyche 0:05:11.279 --> 0:05:13.839 in terms of Okay, you know or you think you 0:05:13.880 --> 0:05:16.560 know right, because you've done five tests and the majority 0:05:16.560 --> 0:05:19.480 of saying one thing. I mean, how has it impacted 0:05:19.520 --> 0:05:22.120 your world in terms of how you go back and 0:05:22.360 --> 0:05:25.560 re enter. I think it has made me more relaxed 0:05:25.680 --> 0:05:29.200 about the risk of contracting it. For sure. Um, you know, 0:05:29.279 --> 0:05:31.599 I'm I'm still being cautious because I think that's the 0:05:31.640 --> 0:05:36.480 responsible thing to do. UM. But I do look at 0:05:36.600 --> 0:05:40.120 my risks of say, contracting it by going into a 0:05:40.279 --> 0:05:44.200 store or um even a restaurant as less than it 0:05:44.240 --> 0:05:47.599 would have been otherwise. But I think, I think I 0:05:47.640 --> 0:05:50.240 do have a responsibility to be careful because we just 0:05:50.320 --> 0:05:53.719 don't have those long term studies showing what it means. 0:05:53.800 --> 0:05:56.000 We don't know how long it lasts. I you know, 0:05:56.080 --> 0:05:59.080 my antibodies might fade. We don't know. And until those 0:05:59.080 --> 0:06:01.520 studies are done, I need to be the sort of 0:06:01.560 --> 0:06:06.040 responsible pandemic citizen and and be careful and cautious around 0:06:06.040 --> 0:06:09.400 social distancing. And that's Bloomberg Stephanie Baker Carroll, and usually 0:06:09.520 --> 0:06:13.200 she's literally chasing after financial criminals. In this case, she 0:06:13.320 --> 0:06:16.360 was trying to chase down a good result for a test. Yeah, 0:06:16.360 --> 0:06:18.839 and what's interesting is her reporting. I love this story 0:06:18.920 --> 0:06:21.640 because she reminds us that these antibody tests, which we 0:06:21.680 --> 0:06:24.159 thought were going to be the holy grail and a 0:06:24.279 --> 0:06:28.280 game changer, well they are imperfect and they're not as 0:06:28.320 --> 0:06:30.800 reliable in terms of what it means to have had 0:06:30.839 --> 0:06:32.960 the virus, to have antibodies, and what does it mean 0:06:33.000 --> 0:06:35.440 as you kind of re enter the world. So love 0:06:35.480 --> 0:06:38.880 her reporting in her firsthand experiences. You're listening to Bloomberg 0:06:38.920 --> 0:06:41.280 Business Week. Coming up, Retail no stranger to the effects 0:06:41.279 --> 0:06:43.920 of the pandemic. This, Jason, we know is an industry 0:06:43.920 --> 0:06:46.719 that has been hit so hard. We're going to talk 0:06:46.760 --> 0:06:50.640 with Alan Ellinger MMG co founder. They are working in 0:06:50.640 --> 0:06:53.440 the retail industry taking a look at those distressed assets. 0:06:53.440 --> 0:06:56.280 So his perspective in just a moment. He's been in 0:06:56.320 --> 0:06:58.239 the business a long time, He's seen a lot of cycles. 0:06:58.560 --> 0:07:02.039 This one is different. And this is Bloomberg. This is 0:07:02.080 --> 0:07:06.039 Bloomberg Business Week with Carol Masser and Jason Kelly from 0:07:06.120 --> 0:07:09.720 Bloomberg Radio, and today we're bringing some the most important 0:07:09.800 --> 0:07:12.880 and informative conversations we had on our daily Bloomberg Business 0:07:12.920 --> 0:07:16.000 Week radio show across the week, Carol and Jason, you know, 0:07:16.000 --> 0:07:18.600 we'd like to remind everybody that we're doing these interviews 0:07:18.640 --> 0:07:21.640 as news is happening and crossing the Bloomberg terminal kind 0:07:21.640 --> 0:07:24.120 of fast and furiously. And that was true for the 0:07:24.160 --> 0:07:28.400 retail industry, Brooks Brothers and so La Tabla filing bankruptcy, 0:07:28.520 --> 0:07:31.840 bed Bath and Beyond announcing plans to cut about its stores. 0:07:32.120 --> 0:07:34.360 So it's been very tough on the retail front just 0:07:34.520 --> 0:07:38.280 this week alone. Alan Ellinger is someone who has worked 0:07:38.320 --> 0:07:41.560 within the retail industry for some forty years. He is 0:07:41.600 --> 0:07:45.520 co founder senior managing partner of the investment bank MMG Advisors, 0:07:45.720 --> 0:07:48.960 and he says this time is unlike any other. As 0:07:48.960 --> 0:07:52.960 a firm, we've been working remotely. Um. Our office closed 0:07:53.000 --> 0:07:57.119 on March twelve, um and other than our office manage, 0:07:57.120 --> 0:08:00.560 nobody's been backed um. But we've managed to be in 0:08:00.640 --> 0:08:04.840 touch with every one of our clients um um. Right 0:08:04.840 --> 0:08:06.760 now we're handling three bankruptcies. As a matter of fact, 0:08:06.840 --> 0:08:10.640 when the mission three bankruptcies, So our world continues, but 0:08:10.800 --> 0:08:15.360 just continue remotely and quite busy. I my did, yeah, 0:08:15.400 --> 0:08:18.080 and so so busy. It sounds like on sort of 0:08:18.080 --> 0:08:22.600 bankruptcy restructuring side. But presumably, and you know, this is 0:08:22.640 --> 0:08:25.000 what I hear and I'm sure Carol, here is from 0:08:25.360 --> 0:08:28.000 investors that we know. I mean, these are the times 0:08:28.160 --> 0:08:33.080 when maybe there's some values to be had from a 0:08:33.160 --> 0:08:37.240 partnering up perspective, from an acquisition perspective. What are you 0:08:37.360 --> 0:08:40.800 seeing or is it too early to tell? What? It's 0:08:40.840 --> 0:08:42.880 a very it's a really good question what we're seeing 0:08:42.880 --> 0:08:46.600 and what we're experiencing. Or in an enormous amount of 0:08:46.800 --> 0:08:52.720 inbound phone calls from opportunistic buyers, people who know that 0:08:52.760 --> 0:08:56.040 there's going to be bargains out there, um, and they're 0:08:56.120 --> 0:08:58.000 just you know, they've got a lot of dry powder. 0:08:58.440 --> 0:09:01.480 These are both These are both strategics as well as 0:09:01.520 --> 0:09:04.880 private equity um, who are sitting on their sitting on 0:09:04.880 --> 0:09:07.760 those sidelines right now, just waiting to pounce on the 0:09:07.840 --> 0:09:10.840 right opportunities. I just wrote to a to a commercial 0:09:10.880 --> 0:09:14.240 banker this morning, um and and the word that they 0:09:14.360 --> 0:09:17.200 used was that the other shoe hasn't dropped yet. What 0:09:17.320 --> 0:09:20.080 we're saying, what, while there are a lot of bankruptcies 0:09:20.520 --> 0:09:23.120 in the process of the moment um, there are a 0:09:23.120 --> 0:09:27.440 lot of companies who really haven't UM acknowledge the fact 0:09:27.800 --> 0:09:29.679 that they're going to have to make some pretty hard 0:09:29.720 --> 0:09:33.000 decision in the next couple of months. The PPP money 0:09:33.080 --> 0:09:36.679 has has enabled companies to last a little longer. Um. 0:09:36.720 --> 0:09:38.920 You know, people wanted to see company owners who want 0:09:38.960 --> 0:09:41.480 to see what would happen when retail reopened and what 0:09:41.640 --> 0:09:44.199 the if there would be a positive impact on their 0:09:44.200 --> 0:09:46.600 business or not. But you know, we're living through a 0:09:46.640 --> 0:09:48.720 period of time at the moment where for the first 0:09:48.760 --> 0:09:52.720 time ever, both the supply side and the demand side 0:09:52.760 --> 0:09:55.720 have been impacted simultaneously. We've never seen anything like that before. 0:09:56.760 --> 0:10:00.000 On top of which, on top of which, when this happened, 0:10:00.080 --> 0:10:03.920 it happened suddenly, you know, all of a sudden, doors 0:10:03.960 --> 0:10:06.559 were locked and people could not shop in stores, and 0:10:06.640 --> 0:10:09.760 consequently cash flow just dried up. We've never experienced that, 0:10:10.320 --> 0:10:15.400 you know, in the past. When when when companies um 0:10:15.600 --> 0:10:17.319 or skating, I use the words, are skating on thin 0:10:17.440 --> 0:10:21.520 ice UM and they're considering a bankruptcy, you plan it. 0:10:21.640 --> 0:10:24.600 You plan up for sometimes week, sometimes months in advance, 0:10:25.080 --> 0:10:27.000 and you're able to come up with with with a 0:10:27.040 --> 0:10:30.160 plan of volume and because you kind of know what 0:10:30.240 --> 0:10:32.800 you're what you're prior to your sales were in the 0:10:32.840 --> 0:10:34.800 similar dates and you could come up with a with 0:10:34.520 --> 0:10:38.280 a with a financial plan. All that swalled apart because 0:10:38.320 --> 0:10:42.320 there's been there's been no traffic. So UM, you know, 0:10:42.360 --> 0:10:44.599 models filed to chapter eleven on March I think it 0:10:44.600 --> 0:10:48.719 was March eleven. They couldn't they couldn't even run and 0:10:48.800 --> 0:10:50.839 going out of business sale because the stores are locked 0:10:51.400 --> 0:10:54.280 and they're just not reopening. So we've we've definitely we've 0:10:54.280 --> 0:10:57.520 never experienced anything like this. We've also experienced the volume 0:10:57.600 --> 0:11:00.599 of bankruptcys that we're that we're living right now. And 0:11:00.640 --> 0:11:03.240 I gotta tell you, I think it's just beginning. You know, 0:11:03.559 --> 0:11:05.600 we're gonna see a lot more bankruptcy this time, but 0:11:05.920 --> 0:11:09.920 during the balance of this year, maybe it's early next year. UM. 0:11:10.520 --> 0:11:13.520 But I will also tell you that we are overstored 0:11:13.600 --> 0:11:17.520 as a country, We're over invented. Were also over inventory 0:11:17.720 --> 0:11:22.960 as a country. So the fact that UM retail organizations, 0:11:23.000 --> 0:11:26.720 as an example, are using I'm using the term the 0:11:26.760 --> 0:11:30.120 cover of COVID. You know, they're they're they're using they're 0:11:30.200 --> 0:11:33.600 using this period of time to clean up their balance sheets, UM, 0:11:33.880 --> 0:11:37.240 to get out of unproductive leases. You look at like 0:11:37.320 --> 0:11:41.720 copanies like J. C. Penny or who have more stores 0:11:41.800 --> 0:11:44.000 across America, and you know a lot of those stores 0:11:44.040 --> 0:11:47.360 are unproductive there in C and D malls, so you 0:11:47.400 --> 0:11:50.200 know they don't those are not money making stores. This 0:11:50.280 --> 0:11:53.720 gives them an opportunity to clean up their balance sheet, 0:11:53.880 --> 0:11:58.040 get get out of unproductive leases. And because it's under 0:11:58.040 --> 0:12:01.600 the under the cover of COVID, they won't have the 0:12:01.640 --> 0:12:04.320 stigma once they come out of it and they were 0:12:04.360 --> 0:12:07.400 able to rebuild their business. It's kind of like fruiting 0:12:07.400 --> 0:12:10.280 a treat, you know, your fruity treat to make it healthier. 0:12:10.360 --> 0:12:14.400 That's exactly what's happening with those retail organizations who have 0:12:14.600 --> 0:12:18.200 the ability to get into bankruptcy and have the financing 0:12:18.200 --> 0:12:21.760 them to come out of it with a successful plan. 0:12:22.679 --> 0:12:25.120 So what are the longer term implications of all of 0:12:25.160 --> 0:12:29.160 this on this industry. Well, there a couple of things. 0:12:29.400 --> 0:12:32.440 One is, we've all been living at home and have 0:12:32.800 --> 0:12:36.680 had a great respect now for D t C companies, 0:12:36.880 --> 0:12:39.440 those those companies that we can buy part online. So 0:12:39.480 --> 0:12:42.079 we're going to see a lot of growth in D 0:12:42.160 --> 0:12:45.080 two C, continuing growth in D two C. I believe 0:12:45.240 --> 0:12:49.120 that we're also going to see a number of heritage companies, 0:12:49.120 --> 0:12:51.520 companies have been around for a long time who have 0:12:51.600 --> 0:12:56.599 been unsuccessful in building their own DWOC companies buying or 0:12:56.600 --> 0:12:59.640 attempting to buy DTOC companies now that they can see 0:12:59.640 --> 0:13:02.160 them act and and there'll be some values out there 0:13:02.840 --> 0:13:07.080 the um, so we'll see consolidation in that area. UM. 0:13:07.360 --> 0:13:08.640 We're we're also going to see is a great deal 0:13:08.760 --> 0:13:11.199 promotion coming up over the next couple of months. UM. 0:13:11.240 --> 0:13:14.080 As as companies try to clear their inventories, they're being 0:13:14.200 --> 0:13:18.640 an enormous amount of inventory in the stores on the water. Uh, 0:13:18.720 --> 0:13:21.760 you know, it's it's it's just it's built up over 0:13:21.800 --> 0:13:24.760 a period of time. That inventory has to be moved, 0:13:25.360 --> 0:13:27.880 it has to be liquefied into cash. Now, there are 0:13:27.960 --> 0:13:30.800 some companies who are packing and holding their goods right 0:13:30.920 --> 0:13:33.560 meaning if if it's not highly if it's not high fashion, 0:13:33.640 --> 0:13:36.160 they're going to just put it away and stay those 0:13:36.160 --> 0:13:38.920 goods until next year. So Alan, what does the second 0:13:38.960 --> 0:13:43.319 half look like, Well, else gonna be highly promotional. UM. 0:13:43.440 --> 0:13:46.440 I think you know, the customer will benefit from the 0:13:46.559 --> 0:13:50.160 uncertainty of inventory to have in the marketplace. Right now, UM, 0:13:50.160 --> 0:13:53.280 we're going to see a lot more bankruptcies, um, and 0:13:53.600 --> 0:13:57.160 I will you'll start to see deals happening. That's Alan Ellen. 0:13:57.200 --> 0:13:59.080 You're a co founder and senior managing partner of the 0:13:59.080 --> 0:14:02.280 investment bank and G Advisors. And he says, you know, Jason, 0:14:02.320 --> 0:14:05.520 a lot more bankruptcies and retail to come. He does 0:14:05.559 --> 0:14:07.640 think j C. Pennies and Macy's will make it through. 0:14:07.720 --> 0:14:10.280 But you know, he talks about something we've heard from 0:14:10.320 --> 0:14:14.000 so many other folks were an overstored country well, and 0:14:14.040 --> 0:14:16.240 we heard that throughout the week, and certainly one of 0:14:16.280 --> 0:14:18.679 the threads we were pulling on that we will continue 0:14:18.679 --> 0:14:22.560 to pull on, is this over retailed world changing consumer 0:14:22.600 --> 0:14:25.800 habits in many ways, what effect that may have. Folks 0:14:25.800 --> 0:14:28.120 are still shopping for the moment. I think, to the 0:14:28.160 --> 0:14:32.080 surprise of many those second quarter earnings results, those are 0:14:32.080 --> 0:14:34.680 going to give us a window into what people were 0:14:34.680 --> 0:14:36.960 spending and where they were spending it. But the I'll 0:14:37.000 --> 0:14:40.800 look it isn't great. So definitely an area to keep 0:14:40.800 --> 0:14:43.560 an eye on because that consumer economy, we know it 0:14:43.640 --> 0:14:46.560 makes everything run. You're listening to Bloomberg Business Week coming up, 0:14:46.600 --> 0:14:50.240 Facebook under pressure again, why brands of consumers are losing 0:14:50.280 --> 0:14:53.320 trust in the social media Giant our conversation with Zyper 0:14:53.400 --> 0:15:02.160 CEO Amber Atherton. When we return this is Bloomberg. This 0:15:02.440 --> 0:15:06.000 is Bloomberg Business Week with Carol Masser and Jason Kelly 0:15:06.320 --> 0:15:09.200 from Bloomberg Radio. We're bringing some of the most important 0:15:09.240 --> 0:15:12.280 and informative conversations we had on our daily radio show 0:15:12.400 --> 0:15:15.440 throughout the week. Jason was Week seventeen. A lot of 0:15:15.440 --> 0:15:18.240 stuff going on, even though it was coming after a 0:15:18.240 --> 0:15:21.840 long holiday weekend. And in the news this week was Facebook, 0:15:22.160 --> 0:15:25.560 their chief operating officer Cheryl Sandberg and CEO Mark Zuckerberg. 0:15:25.640 --> 0:15:28.600 They met up with civil rights organizations. They are critical 0:15:28.640 --> 0:15:31.480 of the company for not taking seriously their demands to 0:15:31.640 --> 0:15:35.880 better police its service from hate speech and misinformation. All 0:15:35.920 --> 0:15:38.120 of this has led to some big name companies, Starbucks 0:15:38.120 --> 0:15:41.800 and Pepsi among them, boycotting the social network. Well, and 0:15:41.920 --> 0:15:44.040 that's what it comes down to, right, This isn't just 0:15:44.080 --> 0:15:47.160 a social justice issue, this is an economic issue. Now. 0:15:47.520 --> 0:15:49.680 We went to one of our trusted voices on all 0:15:49.760 --> 0:15:53.000 things social media, that is ziper CEO Amber Atherton. She 0:15:53.200 --> 0:15:55.320 was back with us to help us break it all down. 0:15:56.120 --> 0:15:59.760 They ultimately failed to appease the organizers of the ad 0:16:00.080 --> 0:16:04.320 ad boycott. So I mean what we're seeing from brands 0:16:04.440 --> 0:16:07.800 is and and consumers who are leaving the platform is 0:16:07.840 --> 0:16:11.800 that people who are no longer on Facebook are off 0:16:11.800 --> 0:16:14.160 the platform because they simply do not trust it with 0:16:14.240 --> 0:16:17.720 their personal info and they do not agree with how 0:16:17.760 --> 0:16:21.000 the company conducts business. So I think what we're seeing 0:16:21.000 --> 0:16:23.880 from advertisers is, you know, they want to be where 0:16:23.880 --> 0:16:26.800 their consumers are, and this is more about advertisers stance 0:16:26.920 --> 0:16:30.720 on hate speech and not wanting to support that. However, 0:16:30.760 --> 0:16:34.000 this is temporary, so um, it's going to be interesting 0:16:34.040 --> 0:16:38.320 to see if brands in this temporary boycott are able 0:16:38.400 --> 0:16:42.240 to find new channels for growth. And if that's the case, 0:16:42.280 --> 0:16:44.040 then I think it's going to be interesting to see 0:16:44.040 --> 0:16:49.760 where Facebook is left well and and Emperor. It feels 0:16:49.800 --> 0:16:53.160 like such a catalytic moment to some extent for a 0:16:53.200 --> 0:16:58.240 lot of brands, because given the social unrest that's out there, 0:16:58.440 --> 0:17:02.600 it feels like consume sumers are demanding more of brands, 0:17:02.640 --> 0:17:07.359 demanding more transparency, demanding answers, demanding them to some extent 0:17:07.440 --> 0:17:09.920 to take a stand. Do you agree with that? I mean, 0:17:09.960 --> 0:17:12.040 do you see sort of a different do you see 0:17:12.040 --> 0:17:14.280 in here and sort of feel a different tone around 0:17:14.320 --> 0:17:18.440 brands right now, Yeah, for sure. I mean I can 0:17:18.440 --> 0:17:21.000 tell you at Ziper our customers who are looking to 0:17:21.040 --> 0:17:23.920 build community with their customers. At least ten of our 0:17:23.960 --> 0:17:28.040 customers have joined this Facebook ad boycott. That's Duncan free 0:17:28.080 --> 0:17:31.040 to La. You know, these are big companies who want 0:17:31.080 --> 0:17:34.119 to support what their consumers views are, which is not 0:17:34.240 --> 0:17:36.919 to fun hate speech. So I think that this is 0:17:36.960 --> 0:17:40.639 an exciting time for brands to really challenge themselves to 0:17:40.680 --> 0:17:44.280 innovate on new ways to collaborate with their consumers. And 0:17:44.359 --> 0:17:47.280 we know that this new generation of gen Z, you 0:17:47.320 --> 0:17:50.520 know they thirty six percent of gen Z consumers would 0:17:50.560 --> 0:17:53.520 like to collaborate with the brands that they love. So 0:17:53.600 --> 0:17:56.160 I think this all plays into this theme that we've 0:17:56.200 --> 0:17:59.760 been talking about since January, which is the decentralization as 0:17:59.760 --> 0:18:02.760 they book and how you know, the leading DTC brands 0:18:02.760 --> 0:18:06.800 who are really on the forefront of innovation are democratizing 0:18:06.840 --> 0:18:09.560 how they build brands, and it's it's no longer the 0:18:09.640 --> 0:18:13.720 kind of status quo of traditional Facebook advertising. And so 0:18:13.840 --> 0:18:15.760 every when you say they want to collaborate, they want 0:18:15.760 --> 0:18:17.560 to engage it. What does that look like? Give us 0:18:17.600 --> 0:18:21.600 an example there? Yeah, I think it's probably worth referencing that. 0:18:21.680 --> 0:18:23.760 You know, this month we signed a big deal with 0:18:23.800 --> 0:18:25.720 General Mills where we'll be helping a lot of their 0:18:25.760 --> 0:18:30.360 brands across the near to be identifying their everyday consumers 0:18:30.359 --> 0:18:32.640 to be the genuine fans of the brands that don't 0:18:32.640 --> 0:18:35.040 have a lot of interaction directly with the brand, and 0:18:35.480 --> 0:18:38.320 we're able to bring them into this closed chat based 0:18:38.400 --> 0:18:42.320 environment to collaborate with their consumers on product innovation, kind 0:18:42.320 --> 0:18:44.760 of like a focus group. Two point oh and and 0:18:44.800 --> 0:18:48.199 really just proved that customers who become part of a 0:18:48.240 --> 0:18:52.160 community with a brand, they are ten times more likely 0:18:52.280 --> 0:18:54.639 to repeat rates than somebody who was acquired through a 0:18:54.680 --> 0:18:58.399 Facebook at So I think there's some really compelling evidence 0:18:58.520 --> 0:19:02.680 that if you in where your customers are and invest 0:19:03.240 --> 0:19:07.359 in spending time building a relationship in a community setting, 0:19:07.560 --> 0:19:10.359 then that does pay off in terms of LTV. And 0:19:10.400 --> 0:19:13.920 I think what we're seeing more brands interested and how 0:19:13.960 --> 0:19:17.119 can they increase LTV, which will ultimately allow them to 0:19:17.119 --> 0:19:20.399 spend more an acquisition and than they are focused on 0:19:20.440 --> 0:19:23.200 getting cheap acquisition because let's face it, Facebook has become 0:19:23.280 --> 0:19:26.399 more expensive to a quiet customer. Well, this is what 0:19:26.520 --> 0:19:28.600 I wanted to ask you, Amber, because I do feel 0:19:28.600 --> 0:19:30.960 like a lot of brands still need Facebook and even 0:19:31.000 --> 0:19:33.840 though they may be doing a temporary boycott, as you said, 0:19:33.880 --> 0:19:36.000 let's see if it will be temporary, because I do 0:19:36.080 --> 0:19:39.359 wonder if brands kind of ultimately still need that social 0:19:39.359 --> 0:19:43.160 media platform of Facebook. But as there are more alternatives, 0:19:43.600 --> 0:19:46.000 might people turn away and it's just a case of 0:19:46.440 --> 0:19:49.760 they're just you know, kind of waiting it out until 0:19:49.800 --> 0:19:54.440 there are other alternatives to you know, successfully um market 0:19:55.160 --> 0:19:59.639 on social media. Yeah. Absolutely, And I think this is 0:20:00.000 --> 0:20:01.480 I mean, we can't deny the fact that you know, 0:20:01.480 --> 0:20:04.000 in the first quarter there was a gain of around 0:20:04.000 --> 0:20:07.000 a hundred million monthly active users on Facebook, so you know, 0:20:07.080 --> 0:20:10.040 two point six billion, record high. So you know that 0:20:10.200 --> 0:20:13.720 is there is a huge reach that brands want to 0:20:13.760 --> 0:20:16.119 play with. But I think this is more about the 0:20:16.240 --> 0:20:20.280 values of the platform and the fact is TikTok is rising. 0:20:20.320 --> 0:20:22.320 You know, more customers are saying to us than ever 0:20:22.400 --> 0:20:26.199 that they can acquire users more cheaply and more effectively 0:20:26.280 --> 0:20:29.439 through TikTok. And that's cyper ceo. Amber Atherton really one 0:20:29.480 --> 0:20:31.760 of our trusted voices when it comes to Silicon Valley 0:20:31.960 --> 0:20:35.680 and social media. Carol because Facebook and all of social 0:20:35.720 --> 0:20:38.120 media find themselves in the midst of all of these 0:20:38.160 --> 0:20:41.280 crises that we're facing, whether it be the pandemic, whether 0:20:41.320 --> 0:20:43.680 it be social justice. And also, by the way, we've 0:20:43.720 --> 0:20:46.679 got a huge election coming up exactly, and people are 0:20:46.680 --> 0:20:50.240 concerned also about that kind of content right on the platform. 0:20:50.359 --> 0:20:52.800 You're listening to Bloomberg business Week coming up chef and 0:20:52.840 --> 0:20:56.639 restaurant tour Danielle Blulu, how he's adapting like many in 0:20:56.680 --> 0:20:59.960 his industry and finding his way back. This is Bloomberg. 0:21:02.840 --> 0:21:06.320 This is Bloomberg Business Week with Carol Masser and Jason 0:21:06.440 --> 0:21:09.560 Kelly from Bloomberg Radio and to big we're bringing some 0:21:09.600 --> 0:21:12.159 of the most important, we hope informative conversations. Carol and 0:21:12.160 --> 0:21:14.800 I had on our daily Bloomberg Business Week radio show 0:21:15.200 --> 0:21:19.280 throughout the week and loved catching up with this famous chef. 0:21:19.320 --> 0:21:21.560 I have to say, he is just so lovely. We 0:21:21.600 --> 0:21:24.119 caught up with him initially in early April. It's just 0:21:24.320 --> 0:21:28.000 Jason as he was shutting down his restaurants. He like 0:21:28.160 --> 0:21:31.080 many are pivoting in the industry, finding their way back, 0:21:31.600 --> 0:21:36.520 and just this week he was offering up Danielle Blulu 0:21:36.800 --> 0:21:39.560 kitchen in a terrorist setting in front of his famed 0:21:39.560 --> 0:21:42.720 restaurant bearing his own name, Danielle, of course, and we 0:21:42.760 --> 0:21:44.560 actually caught up with him on the night he was 0:21:44.600 --> 0:21:48.680 introducing it. We are putting a sidebook cafe at restaurant Danielle, 0:21:48.720 --> 0:21:54.080 which restaurant Danielle is twenty eight years old. When he 0:21:54.160 --> 0:21:55.920 was on seventy six Street, he used to have a 0:21:55.960 --> 0:21:58.520 sidebook cafe. When I moved to sixty five and never 0:21:58.560 --> 0:22:01.800 really put a sidebook cafe. We had enough room whenn inside. 0:22:01.840 --> 0:22:06.399 And and we are doing um because I've started the 0:22:06.440 --> 0:22:11.879 business of delivery and to go daniel Bully Kitchen, so 0:22:12.119 --> 0:22:14.480 we are serving the menu of daniel Bully Kitchen on 0:22:14.600 --> 0:22:19.440 the terrace of Danielle. So more casual and more approachable, 0:22:19.640 --> 0:22:25.200 but fun and and and and really it's an opportunity 0:22:25.240 --> 0:22:29.280 because I think we have a beautiful, uh facade, We 0:22:29.320 --> 0:22:32.639 have a beautiful space, and that's the only place we 0:22:32.680 --> 0:22:34.879 can really serve our guests. And we felt that it 0:22:34.960 --> 0:22:37.760 would be good to bring more staff and to bring 0:22:38.560 --> 0:22:43.600 new to bring guests back. I have to imagine, Danielle, 0:22:43.640 --> 0:22:47.359 that your clientele, many of whom are our listeners, uh 0:22:47.680 --> 0:22:50.880 so well known across Manhattan and the world. They must 0:22:50.880 --> 0:22:53.159 have been clamoring for this, right. I mean, have you 0:22:53.200 --> 0:22:54.959 been getting a lot of calls to people saying, I 0:22:54.960 --> 0:22:57.560 want to come back in some former fashion, come cook 0:22:57.600 --> 0:23:00.600 for me the absolutely, So we do that. We have 0:23:00.680 --> 0:23:04.040 the come cook for me by by sending them meal home, 0:23:04.560 --> 0:23:09.080 of course, and we also do package for destination the 0:23:09.080 --> 0:23:14.040 Emptons or other places. People drive miles from the frid 0:23:14.119 --> 0:23:16.719 state to come and pick up a box with all 0:23:16.840 --> 0:23:19.199 kinds of meals prepared for them to take home. But 0:23:19.880 --> 0:23:23.000 I mean having them at the restaurant and being able 0:23:23.080 --> 0:23:27.800 to again welcome, serve them, pamper them and offer them 0:23:28.280 --> 0:23:31.760 something we feel, uh, it makes us very happy and 0:23:31.880 --> 0:23:35.440 I think it will make them very happy. Our guest. Yes, Well, 0:23:35.480 --> 0:23:37.639 you know it's interesting, Danielle, like we have been talking 0:23:37.640 --> 0:23:39.840 to a lot of folks, especially within your industry, that 0:23:39.960 --> 0:23:42.120 you've got to figure out how to pivot here, right 0:23:42.200 --> 0:23:44.960 because it's not like you can flip a switch and 0:23:45.000 --> 0:23:47.320 go back to the way it was pre COVID, And 0:23:47.359 --> 0:23:50.560 so it sounds like that's what you guys are doing. Yeah, 0:23:50.640 --> 0:23:53.159 very much. And we also opened the West Side. I 0:23:53.200 --> 0:23:57.040 have a restaurant at sixty four Broadway. Babu and episode 0:23:57.160 --> 0:24:00.760 Blue open yesterday or this morning actually this morning we 0:24:00.840 --> 0:24:03.480 opened a Pie three Bullie, so it's a retail store 0:24:03.520 --> 0:24:06.840 where it's opened all day from breakfast to early evening 0:24:07.440 --> 0:24:10.440 and people can have salads and sandwiches and things who 0:24:10.440 --> 0:24:15.679 are old, home baked and homemade, and then we babu 0:24:15.880 --> 0:24:18.199 as a huge There are some sixty four Broadway, so 0:24:18.240 --> 0:24:22.760 that's very very convenient as well. And we took Cafe 0:24:22.760 --> 0:24:25.640 Bullou up in the Berkshire and we did a pop 0:24:25.720 --> 0:24:28.880 up there in a wonderful vale shateau called the bland Hire. 0:24:29.200 --> 0:24:33.159 So it really we find I mean, it's all this 0:24:33.280 --> 0:24:35.840 opportunity to try to bring back staff. I mean we 0:24:35.840 --> 0:24:38.639 were more than seven hundred and fifty staff and we 0:24:38.720 --> 0:24:42.000 went down to seven people and now we're back up 0:24:42.040 --> 0:24:46.600 two hundred and twenty total around the different businesses we 0:24:46.640 --> 0:24:50.080 have reopened and we are pushing up and bringing more people. 0:24:50.320 --> 0:24:56.040 So wow, that's big moves. And in terms of capacity, 0:24:56.240 --> 0:25:00.040 danielle Um, what is the I mean, what can you 0:25:00.119 --> 0:25:03.520 do at at what you're opening tonight versus what you 0:25:03.520 --> 0:25:06.960 would be able to do inside. I think I think 0:25:06.960 --> 0:25:10.480 that tell us is only I will say for right now, 0:25:11.080 --> 0:25:14.400 it's and and because you know, if it's if it's beautiful, 0:25:14.400 --> 0:25:17.240 whether we might be able to extend more tables. But 0:25:17.480 --> 0:25:21.080 if it's a little bit greasily like tonight, we want 0:25:21.119 --> 0:25:23.480 to stander the canopy and we have a limitation of 0:25:23.480 --> 0:25:27.440 about thirty five to fourty seats, but that's pretty good. 0:25:27.480 --> 0:25:30.040 And then if it's nice, whether we might be able 0:25:30.080 --> 0:25:33.679 to double that size. But that's nothing compared to the 0:25:33.760 --> 0:25:37.720 size on the inside, where normally we have private dining rooms. 0:25:37.760 --> 0:25:39.880 We have the barn nouns, we have the dining room, 0:25:39.920 --> 0:25:44.960 which could almost bring hundred and eighty seats or more. 0:25:46.119 --> 0:25:51.240 So it's a very different business model, and it's definitely 0:25:51.359 --> 0:25:58.000 not um a profitable model, but it's very It motivates 0:25:58.080 --> 0:26:00.840 us so much to do something with the whole concept 0:26:00.840 --> 0:26:04.320 of outdoor dining. I'm sure you've knew about it before, 0:26:04.359 --> 0:26:06.159 but you've probably learned more than you ever thought you 0:26:06.200 --> 0:26:09.560 would about outdoor dining, given that that's how we're all 0:26:09.920 --> 0:26:14.679 eating out these days. How do you view it? What 0:26:14.720 --> 0:26:17.199 have you learned about it in terms of what you 0:26:17.240 --> 0:26:19.840 can and can't do, and maybe what the future is 0:26:19.920 --> 0:26:22.120 given that we're going to be in this for some time. 0:26:23.200 --> 0:26:25.880 I know and and and thanks God. I mean, we're 0:26:25.920 --> 0:26:28.720 in it in the summer right now, and the fall 0:26:28.840 --> 0:26:34.199 should be mellow until at least November. But the the 0:26:34.280 --> 0:26:37.840 Mayor of New York has really opened up and I 0:26:37.840 --> 0:26:41.359 think many cities all over the country, I've opened up 0:26:41.359 --> 0:26:44.120 the opportunity for restaurate or to be able to put 0:26:44.160 --> 0:26:47.880 table outside in places we would have never been authorized before. 0:26:48.640 --> 0:26:54.560 And they are really helpful, um meaningful I mean mindful 0:26:54.760 --> 0:27:00.480 of of course the security for the guests, but also um, 0:27:00.760 --> 0:27:05.000 really give the chance for the restaurator to have a 0:27:05.080 --> 0:27:09.320 meaningful business outdoor for the time being, for the time being, 0:27:09.440 --> 0:27:13.919 let's say. And of course the fine dining restaurant is 0:27:13.920 --> 0:27:16.879 more complicated, but not too many restaurants as outdoors there. 0:27:17.240 --> 0:27:20.880 For cafe the small Beast Row, we have like four 0:27:20.920 --> 0:27:24.480 or five tables outside. I've seen them taking half a 0:27:24.560 --> 0:27:27.879 block and going around the block with tables. So it 0:27:27.880 --> 0:27:30.440 seems like they have more tables outside and inside now. 0:27:31.000 --> 0:27:34.919 But but it's good, thank God. Yeah, exactly, and that 0:27:35.000 --> 0:27:37.680 there is that opportunity to do it. You know, Um, 0:27:37.800 --> 0:27:40.399 we were talking without Kate Crater, who covers um. I think, 0:27:40.480 --> 0:27:43.440 as you know, we love we love talking with Kate, 0:27:43.560 --> 0:27:46.880 and you know we were wondering, you know, you were 0:27:47.040 --> 0:27:50.160 going I thought to talk to Lincoln Center about doing 0:27:50.160 --> 0:27:52.920 maybe big screens for events like the US Open, so 0:27:53.000 --> 0:27:56.240 that maybe diners could watch from barbarous Are you doing that? 0:27:56.320 --> 0:28:00.200 Are you moving ahead with that? Well, I am all 0:28:00.640 --> 0:28:03.919 convinced that we can do something, and I am looking 0:28:03.960 --> 0:28:06.840 at sponsor. It's it's all about trying to find sponsoring, 0:28:07.280 --> 0:28:10.320 to be able to create something for the moment, a 0:28:10.359 --> 0:28:13.119 little bit of a spontaneous things and for a short 0:28:13.160 --> 0:28:16.080 lived but at least we can do things to entertain guests. 0:28:16.080 --> 0:28:21.480 But I think, um, it is important that because the 0:28:21.560 --> 0:28:25.760 Open is happening, that we are able to show it 0:28:25.800 --> 0:28:31.880 all over town and it's uh, it will be fantastic. 0:28:31.960 --> 0:28:34.199 I mean, I would love to be able to show it. 0:28:34.200 --> 0:28:37.040 That Danielle is needed. But at Lincoln Center there is 0:28:37.040 --> 0:28:40.840 the huge esplanade where I'm sure people don't have to crowd, 0:28:40.880 --> 0:28:44.560 and they have the entire war of the buildings where 0:28:44.600 --> 0:28:48.120 they could project the games and put some speakers. So 0:28:48.920 --> 0:28:52.560 I hope there will be you know, interested to do that. 0:28:52.840 --> 0:28:56.000 Of course. So Danielle, you know, the last time we 0:28:56.040 --> 0:28:58.440 talked to you, um, you know the the pandemic was 0:28:58.520 --> 0:29:03.040 very much on in the city. Unfortunately a very different time, um. 0:29:03.080 --> 0:29:05.640 But obviously not much, not too much has changed, although 0:29:05.680 --> 0:29:07.520 you know, little baby steps for it that we're taking 0:29:07.560 --> 0:29:10.600 in terms of outdoor dining. I do wonder for you 0:29:10.760 --> 0:29:13.120 because at the time you were rightly concerned. I'm sure 0:29:13.160 --> 0:29:16.000 you remain concerned about the future of your business and 0:29:16.040 --> 0:29:19.640 maybe more importantly, the future of fine dining all across 0:29:19.680 --> 0:29:22.760 the country. Where do we stand now? What do you 0:29:22.920 --> 0:29:24.880 think about now when it comes to the future of 0:29:24.920 --> 0:29:28.600 fine dining. Well, for a while, it would have to 0:29:28.640 --> 0:29:34.960 be slightly recliber I mean slightly or strongly recliber uh 0:29:35.000 --> 0:29:39.800 In in his um ambition of offering, I would say, 0:29:39.920 --> 0:29:45.400 in his size, uh. You know, we find dining. When 0:29:45.400 --> 0:29:47.080 we think of fine dining, that means we're going to 0:29:47.160 --> 0:29:53.240 reopen our restaurant inside and um in its price. Maybe 0:29:54.000 --> 0:29:57.560 maybe more option to be able to have choice of 0:29:57.760 --> 0:30:00.840 not having to go for a tasting manum me. But 0:30:01.000 --> 0:30:05.840 maybe some sampler option, maybe some hours of operation or 0:30:05.920 --> 0:30:11.280 maybe shrunk down a little bit because of the cost 0:30:11.320 --> 0:30:15.760 of doing business, and so you know, less less days 0:30:15.800 --> 0:30:19.880 of operation will mean more control in in the cost 0:30:19.920 --> 0:30:23.760 of doing business and slowly get back to where it belonged, 0:30:23.800 --> 0:30:26.200 because I think fine dining will not go away. But 0:30:26.600 --> 0:30:29.240 I'm hoping that restaurant Danielle I can do a pop 0:30:29.320 --> 0:30:34.120 up for the months to come where I create something 0:30:34.280 --> 0:30:40.240 very casual, very disrupting, and very different than Uh. I'm 0:30:40.240 --> 0:30:43.800 basically covering the skin of fine dining and putting a 0:30:43.880 --> 0:30:48.640 skin of a casual place. That's chef and restaurateur Danielle Bulue. 0:30:49.080 --> 0:30:52.520 Check out our full conversation it's in our extra podcast, Jason. 0:30:52.600 --> 0:30:54.800 But you know, man, just to hear him talk about 0:30:54.800 --> 0:30:56.640 how many workers they had, how many they had to 0:30:56.720 --> 0:30:58.720 let go, how many they've been able to bring back. 0:30:58.760 --> 0:31:01.760 I mean, it has been so tough for anyone in 0:31:01.800 --> 0:31:04.760 this industry. Well, and look, this is a guy owing 0:31:04.800 --> 0:31:08.520 to the success of his signature restaurant in New York City, 0:31:08.560 --> 0:31:10.560 but also a lot of the projects he has in 0:31:11.040 --> 0:31:13.320 other parts of New York City and beyond. People are 0:31:13.360 --> 0:31:15.560 looking to him for leadership, and I think he feels 0:31:15.600 --> 0:31:19.520 a real responsibility to other chefs coming up behind him 0:31:19.560 --> 0:31:22.280 and his peers to really make a difference and really 0:31:22.480 --> 0:31:25.400 chart a course to find dining in the future. Yeah, 0:31:25.400 --> 0:31:27.800 and bottom line, he says future fine Dining. You asked 0:31:27.880 --> 0:31:30.000 him about that. More options when it comes to pricing, 0:31:30.040 --> 0:31:32.640 menus and hours of operations. So yeah, things are going 0:31:32.720 --> 0:31:35.040 to change, they are. Well. That wraps up the first 0:31:35.040 --> 0:31:37.640 hour the weekend edition to Bloomberg Business Week from Bloomberg Radio. 0:31:37.720 --> 0:31:40.240 I'm Jason Kelly and I'm Carol mass are plenty coming 0:31:40.280 --> 0:31:43.040 up in our next hour, including a conversation with Trinity 0:31:43.040 --> 0:31:46.840 College President Joanne Berger Sweeney how her school is planning 0:31:46.840 --> 0:31:49.680 to reopen in the full, what it's doing. Also when 0:31:49.680 --> 0:31:52.880 it comes to diversity and inclusion. Right, we're talking about 0:31:52.920 --> 0:31:55.120 a woman. She is the first one and the first 0:31:55.360 --> 0:31:59.680 African American to run that college. It's a prestigious school 0:31:59.680 --> 0:32:03.880 there in Hartford, Connecticut. So she is living all of 0:32:03.920 --> 0:32:07.840 these crises at once. Plus the return of Broadway, well 0:32:08.320 --> 0:32:10.600 it's going to be delayed once again. We caught up 0:32:10.640 --> 0:32:13.600 with Broadway League President Charlotte Saint Martin. Yeah, we're all 0:32:13.640 --> 0:32:16.160 gonna have to be a patient just a little bit longer. 0:32:16.320 --> 0:32:24.640 This is Bloomberg. This is Bloomberg Business Week with Carol 0:32:24.680 --> 0:32:29.000 Masser and Jason Kelly from Bloomberg Radio. Hello, I'm Carol 0:32:29.080 --> 0:32:31.480 Masser and I'm Jason Kelly plenty ahead for you in 0:32:31.600 --> 0:32:34.600 this hour. The weekend edition of Bloomberg Business Week, including 0:32:34.920 --> 0:32:39.320 the relationship between Washington and Silicon Valley, continues to be fraught, 0:32:39.400 --> 0:32:41.680 maybe only getting more fraud. We have a bit of 0:32:41.680 --> 0:32:44.920 a theme developing here in the second hour, because we're 0:32:44.920 --> 0:32:48.120 gonna talk now about an M I T study that 0:32:48.360 --> 0:32:53.640 looks at racism and diversity through the lens of economic opportunity. 0:32:53.680 --> 0:32:56.200 It's a new report from M I T that finds 0:32:56.400 --> 0:33:00.320 blackmail college grads have suffered the most disconcerting law uses. 0:33:00.680 --> 0:33:04.000 Bloomberg Week Economics editor Peter Coy and Bloomberg Week editor 0:33:04.080 --> 0:33:06.480 Joel Webber broke it down. It's a study called the 0:33:06.520 --> 0:33:11.320 Faltering Escalator of Urban Opportunities by David Autour, a prominent 0:33:11.680 --> 0:33:14.720 economists M I T. Who I really love. He does 0:33:14.760 --> 0:33:18.040 such excellent work. This is part of a task force 0:33:18.080 --> 0:33:20.040 that he co chairs called the Task Force and the 0:33:20.080 --> 0:33:24.240 Work of the Future. So the conventional wisdom is that 0:33:24.360 --> 0:33:28.760 cities are good places for opportunity because there are things, 0:33:28.880 --> 0:33:31.360 there are kinds of jobs that are available in cities 0:33:31.400 --> 0:33:34.719 that simply aren't available in suburbs or rural areas. And 0:33:34.920 --> 0:33:37.280 for one while that was true. If you move to 0:33:37.320 --> 0:33:39.680 the city, you were likely to get a better job, 0:33:39.880 --> 0:33:44.040 earn more money, and be on an escalator towards higher 0:33:44.080 --> 0:33:47.920 pay um. But what he's found is that is going 0:33:47.960 --> 0:33:52.200 back as far as that started to become less true, 0:33:52.240 --> 0:33:54.040 and it's become less and less true as time has 0:33:54.080 --> 0:33:58.600 gone by, and uh so there's more of a barbell now. 0:33:58.960 --> 0:34:03.280 There are some great jobs for upper income people, and 0:34:03.440 --> 0:34:06.720 there are some plentiful jobs for people at the bottom, 0:34:08.000 --> 0:34:12.680 whether they are security guards or the food preparation types. Uh, 0:34:12.840 --> 0:34:15.719 you know, service jobs like that, but it's kind of 0:34:15.719 --> 0:34:18.799 a middle paying job. There are far fewer of them 0:34:18.840 --> 0:34:22.040 than they were in past decades. Well. Also with US 0:34:22.280 --> 0:34:25.640 is Business Week editor Joel Wepper joining us from Massachusetts. 0:34:25.680 --> 0:34:28.680 So Joel put this story in context. I mean, we 0:34:28.800 --> 0:34:31.040 love a good Peter Ki story. I know you're never 0:34:31.080 --> 0:34:33.560 want to turn it down to either, but frame this 0:34:33.640 --> 0:34:36.359 for us in in the sort of broader uh theme 0:34:36.360 --> 0:34:39.239 of the magazine and what you're trying to do. UM. 0:34:39.320 --> 0:34:43.080 Funny enough, it relates to a conversation Peter and I 0:34:43.120 --> 0:34:45.279 were actually just having kind of earlier in the day, 0:34:45.320 --> 0:34:48.760 and I think it helps inform some of UM coverage 0:34:48.760 --> 0:34:51.200 that you'll probably continue to be seeing from us because 0:34:51.520 --> 0:34:54.920 you know, cities have really been this UM, this engine 0:34:55.040 --> 0:34:59.319 of economic activity. And that is has been true for 0:34:59.600 --> 0:35:02.080 you know, us being sort of in New York City 0:35:02.120 --> 0:35:05.080 properly most of the time and in the before times UM. 0:35:05.160 --> 0:35:07.879 But if you think about it at large, especially for 0:35:08.000 --> 0:35:10.759 the American economy, that has been the story of UM 0:35:10.920 --> 0:35:14.000 sort of the the economic in gine of America has 0:35:14.040 --> 0:35:19.520 been sort of like the movement towards cities, the economic 0:35:19.560 --> 0:35:22.799 activity that they survived, that they provide. And now that 0:35:22.840 --> 0:35:25.640 the pandemic UM, as Peter kind of said, it actually 0:35:25.680 --> 0:35:30.560 is almost sort of like excellent accelerated some trends and 0:35:30.719 --> 0:35:33.840 some of those were pre existing trends and others were 0:35:34.000 --> 0:35:37.080 were things that were sort of unexpected UM. And I 0:35:37.120 --> 0:35:40.000 think it puts the burden on cities in a in 0:35:40.040 --> 0:35:43.400 a way that UM it doesn't for a lot of 0:35:43.719 --> 0:35:47.160 other economic models. And I think that that is going 0:35:47.239 --> 0:35:50.880 to be UM just an ongoing conversation of like, you know, 0:35:50.920 --> 0:35:52.960 you take New York City for instance, As Peter and 0:35:53.040 --> 0:35:55.560 I were talking about earlier, it was like, so what 0:35:55.640 --> 0:35:57.480 does this mean for the m t A. Right Like 0:35:57.680 --> 0:36:00.280 in d A, all of these things that this city, 0:36:00.360 --> 0:36:03.960 the city needs people in order to to fuel the 0:36:04.000 --> 0:36:06.120 city itself, and the moment that you sort of remove 0:36:06.200 --> 0:36:09.600 the people from that equation, it starts to actually become 0:36:09.680 --> 0:36:14.200 somewhat of the downward spiral. So what does that mean, Peter, 0:36:14.320 --> 0:36:16.840 I mean, like play this out for us, you know, 0:36:16.920 --> 0:36:19.879 based on the folks you talk to and your own 0:36:20.080 --> 0:36:23.960 research and expertise. I mean, we're talking about, as Joel 0:36:24.080 --> 0:36:27.279 just mentioned, basic infrastructure. I mean, just sort of the 0:36:27.320 --> 0:36:31.719 way that cities live and breathe and grow and uh 0:36:31.760 --> 0:36:36.239 and operate. Yeah. Well, New York City is unique in 0:36:36.280 --> 0:36:40.120 the United States and its density, particularly in Manhattan. It's 0:36:40.200 --> 0:36:42.680 not the norm for US cities. You hear a lot 0:36:42.719 --> 0:36:46.040 of people talking about edge cities, which are far less 0:36:46.120 --> 0:36:49.319 dense and in some ways more sustainable. Problem with like 0:36:49.520 --> 0:36:52.040 New York is that the subway needs a lot of 0:36:52.120 --> 0:36:56.200 riders too, you know, to pay a budget. You take 0:36:56.200 --> 0:36:58.200 away all the riders and you still run the trains 0:36:58.320 --> 0:37:02.319 and you're running massive debt. Is that's just unsustainable. So 0:37:02.680 --> 0:37:05.239 you can't get away with less density in New York. 0:37:05.239 --> 0:37:06.840 But I just want to quickly go back to the 0:37:06.880 --> 0:37:11.640 topic of mail um college grads, which Carol mentioned in 0:37:11.640 --> 0:37:16.520 her intro is that that's a special problem because in general, 0:37:16.600 --> 0:37:21.120 the middle paying jobs were held by people maybe without 0:37:22.160 --> 0:37:25.480 college degrees. Uh, And so it was the people without 0:37:25.520 --> 0:37:28.239 college degrees in general who suffered the most from this 0:37:28.400 --> 0:37:34.640 hollowing out. But for black male college grads, they have 0:37:34.800 --> 0:37:38.880 been dragged down as well. And that was one of 0:37:38.880 --> 0:37:42.160 the big surprises for all Tour in his research, that 0:37:42.280 --> 0:37:46.799 they their share of middle paying jobs went down and 0:37:46.800 --> 0:37:51.319 their share of low paying jobs went up from So 0:37:51.680 --> 0:37:55.640 there's a compounding all the other problems we've been talking about, 0:37:55.680 --> 0:37:58.319 and that Sloomberg business Week Economics editor Peter Coy and 0:37:58.320 --> 0:38:02.800 Bloomberg business Week editor Joel Weber joining us this study, 0:38:02.880 --> 0:38:06.400 I think Carol really stopped as short. Well, what's interesting 0:38:06.480 --> 0:38:09.240 is when you think about economics, you know, conventional wisdom 0:38:09.320 --> 0:38:13.359 is that cities provide so much opportunities for everyone, right, 0:38:13.400 --> 0:38:15.840 that you won't get in suburbs or out in the country. 0:38:16.120 --> 0:38:18.359 And yet what the m I T researchers found that 0:38:18.360 --> 0:38:22.239 that's not really the case, right, that cities are just 0:38:22.360 --> 0:38:26.359 not very desirable to workers in middle paying occupations, and 0:38:26.400 --> 0:38:29.839 that's especially the case for blackmail college grad So this 0:38:29.880 --> 0:38:32.640 study really stood out for me this week, And if 0:38:32.640 --> 0:38:34.239 you want to hear a little bit more about what 0:38:34.440 --> 0:38:37.319 that study is about and Peter's reporting, check it out 0:38:37.440 --> 0:38:40.920 online at Bloomberg dot com. You're listening to Bloomberg basically 0:38:41.000 --> 0:38:43.880 coming up. Author of the Code Silicon Valley and the 0:38:43.960 --> 0:38:47.920 Remaking of America, she's back with US University Washington professor 0:38:48.360 --> 0:38:54.120 Margaret O'Mara talking to us about racism and diversity or 0:38:54.120 --> 0:39:03.960 a lack thereof in Silicon Valley. This is Bloomberg. This 0:39:04.239 --> 0:39:07.840 is Bloomberg Business Week with Carol Masser and Jason Kelly 0:39:08.160 --> 0:39:10.960 from Bloomberg Radio. We're bringing some of the most important 0:39:11.000 --> 0:39:14.640 and informative conversations. We had a lot this week happening 0:39:14.680 --> 0:39:17.080 on our daily radio show, and we'd like to remind everybody. 0:39:17.120 --> 0:39:19.560 Jason right, there was so much news going on around 0:39:19.600 --> 0:39:22.319 us when it came to the economic outlook, what's going 0:39:22.320 --> 0:39:24.680 on with companies, and of course what's going on with 0:39:24.719 --> 0:39:27.120 the virus. But one of those topics that stayed front 0:39:27.120 --> 0:39:31.680 and center as well is concerns about racism throughout the country. Absolutely, 0:39:31.760 --> 0:39:35.600 and nowhere is it feeling more important and maybe more 0:39:35.680 --> 0:39:39.200 surprising than Silicon Valley. It's a bastion. We think of 0:39:39.239 --> 0:39:45.480 it as liberalism and progressive thinking. And yet we caught 0:39:45.560 --> 0:39:48.840 up with Margaret O'Meara back with us. She's the author 0:39:49.160 --> 0:39:51.640 of a really great book called The Code, Silicon Valley 0:39:51.680 --> 0:39:55.360 and the Remaking of America. It's out in paperback now, 0:39:55.760 --> 0:39:58.960 and she shared with us her thoughts on the history 0:39:59.120 --> 0:40:01.960 and the current eight of the valley, Silicon Valley, and 0:40:01.960 --> 0:40:05.200 particularly it's biggest companies and and I you know, obviously 0:40:05.400 --> 0:40:07.680 three three that are based in the valley, and so 0:40:07.880 --> 0:40:10.799 that are based in my town of Seattle, UM are 0:40:10.920 --> 0:40:14.279 facing kind of a number of stressors by created by 0:40:14.320 --> 0:40:17.160 this moment. Look, they're they're all doing great. Um. The 0:40:17.160 --> 0:40:20.120 the economy, you know that the Covide economy has has 0:40:20.239 --> 0:40:24.239 created a greater need for what they provide. So the 0:40:24.480 --> 0:40:26.919 so earnings are are you know, some things are down, 0:40:26.960 --> 0:40:30.239 but they're doing pretty well all considered. But they've got 0:40:30.320 --> 0:40:32.560 you know, I think that their problems now both as 0:40:32.719 --> 0:40:36.200 employers UM, there's been a conversation about the lack of 0:40:36.280 --> 0:40:40.040 diversity at the top of Silicon Valley, particularly in engine 0:40:40.040 --> 0:40:41.959 bring teams. That's been going on for a long time. 0:40:42.520 --> 0:40:44.880 And look, the needle has not loosed very much. There's 0:40:44.920 --> 0:40:48.600 still not enough, there's not enough diversity in the c suite, 0:40:48.680 --> 0:40:51.279 not to mention in these key worlds. And I think 0:40:51.360 --> 0:40:54.680 there's the other bigger problem of what, you know, how 0:40:54.719 --> 0:41:00.600 their products the platforms are feeding into um pull arization, 0:41:00.800 --> 0:41:04.080 the questions around hate speech and three speech, the questions 0:41:04.160 --> 0:41:07.040 of where these platforms, you know, what role are they 0:41:07.120 --> 0:41:11.200 playing in this moment and where can they help make 0:41:11.320 --> 0:41:14.759 positive change? All right, So let's split those into two 0:41:14.760 --> 0:41:17.600 and start with the first one, which is the employee 0:41:17.600 --> 0:41:22.120 base and this relationship and lack of diversity, because you know, 0:41:22.200 --> 0:41:24.960 Silicon Valley has long held it itself up as you know, 0:41:25.040 --> 0:41:29.160 this is a meritocracy and so anyone who's qualified should 0:41:29.160 --> 0:41:32.640 be able to be successful. What has hampered that from 0:41:32.640 --> 0:41:35.879 actually happening or is the whole idea of it being 0:41:35.880 --> 0:41:42.920 a meritocracy um false? Well, you know, I think the 0:41:42.960 --> 0:41:45.719 idea of meritocracy goes back deep, and I think what 0:41:45.800 --> 0:41:47.920 it reflects is at the very beginning, and I'm talking 0:41:47.960 --> 0:41:51.480 about the fifties and sixties when electronics was starting to 0:41:51.600 --> 0:41:54.000 cluster in the Bay Area and in the in the 0:41:54.080 --> 0:41:57.839 Valley in particular. These fol thesefol guys, and they were 0:41:57.840 --> 0:42:00.600 all guys, and they were all white guys because they're engineers, 0:42:00.600 --> 0:42:02.640 and there's the fifties, so let's keep them keep that 0:42:02.719 --> 0:42:06.120 in mind. But they were from pretty modest, middle class backgrounds. 0:42:06.120 --> 0:42:08.960 They didn't have family connections, they didn't have money. Um, 0:42:08.960 --> 0:42:11.120 a number of them did very well for themselves. But 0:42:11.160 --> 0:42:13.839 when you think about these iconic founders, people like Bill 0:42:13.920 --> 0:42:17.480 Hewlett and Dave Packard and Bob Noyce and Gordon Moore, 0:42:17.680 --> 0:42:21.759 you know, HP Intel, they all came from small town backgrounds, 0:42:21.960 --> 0:42:24.480 didn't have they you know, they didn't have family connections, 0:42:24.480 --> 0:42:27.120 their money, and so there. It is true that this 0:42:27.239 --> 0:42:31.440 has been a pathway for epic mobility, but that is 0:42:31.560 --> 0:42:34.359 not true now. And funnily enough, one of the things 0:42:34.400 --> 0:42:37.640 that makes the valley so successful is the network between 0:42:38.040 --> 0:42:41.160 you know, across people, people who work together, people who 0:42:41.239 --> 0:42:44.520 fund someone that they know, drawing on you know that 0:42:44.760 --> 0:42:49.640 these these networks of connection has been absolutely critical in 0:42:50.280 --> 0:42:54.320 enabling the industry to generate one generation of company after another, 0:42:54.800 --> 0:42:58.400 and it also closes you out to other possibilities to 0:42:58.480 --> 0:43:01.759 think about, Well, let's press someone of a different engineering program. Well, 0:43:02.160 --> 0:43:04.160 let's look at someone who doesn't look at all like 0:43:04.400 --> 0:43:06.239 I don't have a background that's all at all like 0:43:06.320 --> 0:43:09.239 the other people replended, But let's take a risk. You know, 0:43:09.440 --> 0:43:12.080 venture investing is a really risky business, right you know, 0:43:12.239 --> 0:43:13.759 there are only a few a small number of your 0:43:13.760 --> 0:43:16.560 investments that make all your money. And so I think 0:43:16.600 --> 0:43:20.400 that there's sort of a conservatism in choosing trying to 0:43:20.840 --> 0:43:22.800 head your backs as much as you can by choosing 0:43:22.800 --> 0:43:24.719 people who are kind of known quantities, and often that 0:43:24.760 --> 0:43:27.520 means someone who knows someone you know, and and that 0:43:27.680 --> 0:43:29.719 I think is why the diversity problem is so hard 0:43:29.760 --> 0:43:35.279 to entangle. What what will it take for Silicon Valley 0:43:35.320 --> 0:43:40.920 to be more inclusive? Mm hmm, Well, I think it's 0:43:40.920 --> 0:43:42.960 going to take sort of It's a similar question that's 0:43:43.000 --> 0:43:46.200 posted all of Quirkort America. But I think Silicon Valley 0:43:46.400 --> 0:43:48.960 has a particular pressure on it because these are companies 0:43:48.960 --> 0:43:52.480 that have presented themselves as different kinds of corporations. Um, 0:43:52.520 --> 0:43:56.480 you know that that's not evil and and have and 0:43:56.480 --> 0:43:59.040 and and definitely the talents that they are able to recruit, 0:43:59.080 --> 0:44:02.799 your pain is their key ingredients. There's key competitive advantage. 0:44:03.280 --> 0:44:07.080 And so I think presenting really I think looking seriously 0:44:07.120 --> 0:44:10.600 and taking diversity more seriously UM, and that is going 0:44:10.680 --> 0:44:13.880 to involve I think a real shift in the way 0:44:13.920 --> 0:44:18.239 that you recruit and retain people UM, thinking about sort 0:44:18.239 --> 0:44:21.719 of casting a broader net and UM building a pipeline 0:44:21.800 --> 0:44:25.160 for people who are coming into companies large and small UM. 0:44:25.239 --> 0:44:28.719 And then I think there's also recognizing the great advantages 0:44:28.760 --> 0:44:31.399 that come from having a diverse team in the room. 0:44:31.480 --> 0:44:35.200 That's developing products, that's marketing products. But thinking about UM 0:44:35.239 --> 0:44:39.239 different markets, their whole bottle markets, delicate these have not 0:44:39.320 --> 0:44:42.799 tapped into in part because we have been really really 0:44:43.000 --> 0:44:45.839 at building curtainly in the last twenty years. So that 0:44:46.320 --> 0:44:50.160 are really awesome for upper middle class people in the 0:44:50.239 --> 0:44:54.640 United States. UM, it's like them, and you know, think 0:44:54.680 --> 0:44:57.680 about all these other parties that lie out there when 0:44:57.680 --> 0:45:02.799 you're skiing well gadly and so Margaret, you know, this 0:45:02.880 --> 0:45:06.759 was a week where Mark Zuckerberg and Cheryl Sandberg had 0:45:06.800 --> 0:45:09.800 a meeting that by all accounts, didn't go great with 0:45:09.800 --> 0:45:13.880 with a lot of activists when it comes to social justice. 0:45:14.360 --> 0:45:18.000 You know a lot of criticisms being leveled there at Facebook, 0:45:18.120 --> 0:45:25.000 and from an economic perspective, boycott's underway from really big advertisers, 0:45:25.120 --> 0:45:29.759 brand name companies that have relied on Facebook as a 0:45:29.840 --> 0:45:34.480 means to advertise to literally billions of people. What's the 0:45:34.520 --> 0:45:36.560 next step of that and what do you make of 0:45:36.640 --> 0:45:39.520 this moment for Facebook and some of the other social 0:45:39.560 --> 0:45:42.879 media companies in terms of where they go next, specifically 0:45:42.920 --> 0:45:48.319 around answering questions of social justice. Yeah, well, I think 0:45:48.360 --> 0:45:51.560 for the companies Facebook and Google in particular, that you know, 0:45:51.560 --> 0:45:53.719 that's sort of boycotts, that's hitting them right now, wall right, 0:45:53.760 --> 0:45:57.920 shooting them right there. That's Margaret o'mera, University of Washington, 0:45:58.000 --> 0:46:00.719 professor of history and author of The Code, Silicon Valley 0:46:00.760 --> 0:46:04.640 and the Remaking of America. That book now out in paperback. 0:46:04.680 --> 0:46:06.879 We talked to her a year ago when it came 0:46:06.920 --> 0:46:10.680 out for the first time in hardcover. What's interesting, Jason. 0:46:10.719 --> 0:46:13.279 Her conversation reminded me of that recent story on the 0:46:13.280 --> 0:46:16.000 Bloomberg about what it's like to be a black CEO 0:46:16.040 --> 0:46:19.359 and Silicon Valley, and one takeaway of that story talked 0:46:19.360 --> 0:46:21.520 about how you needed to have a lot of humiliation 0:46:21.920 --> 0:46:24.840 to do business if you're a black CEO and Silicon Valley. 0:46:24.880 --> 0:46:26.640 So I thought, you know, it was great to get 0:46:26.640 --> 0:46:29.960 her perspective on what's going on. Yeah, I totally agree. 0:46:30.000 --> 0:46:32.960 I think this is an area that maybe we've overlooked 0:46:33.000 --> 0:46:36.520 because of Silicon Valley's reputation. But when you pair this 0:46:36.640 --> 0:46:40.200 with what amberra Atherton was saying earlier about the struggles 0:46:40.239 --> 0:46:44.640 of Facebook and social media, Silicon Valley is very, very complicated. 0:46:44.680 --> 0:46:46.920 You're listening to Bloomberg. We're coming up. We're going to 0:46:47.040 --> 0:46:51.719 continue our conversations on systemic racism, diversity, and some of 0:46:51.760 --> 0:46:55.480 the challenges across the nation's biggest and most important institutions. 0:46:55.640 --> 0:46:58.840 Trinity College President Joann Burger Sweeney with us. She says, 0:46:59.040 --> 0:47:01.600 it's a time of hope, but also a time of change. 0:47:01.800 --> 0:47:06.560 It's a great conversation. This is Bloomberg. This is Bloomberg 0:47:06.640 --> 0:47:10.920 Business Week with Carol Masser and Jason Kelly from Bloomberg Radio. 0:47:11.239 --> 0:47:13.160 Today we're using the most important and we hope in 0:47:13.200 --> 0:47:16.800 formative conversations we've had recently on our daily Bloomberg Business 0:47:16.800 --> 0:47:19.400 Week radio show, and Jason one of those conversations was 0:47:19.480 --> 0:47:22.640 with Joanne Berger Sweeney. She is in her sixth year 0:47:22.719 --> 0:47:25.960 as president of Trinity College. You know what's interesting is 0:47:26.239 --> 0:47:29.400 she was at um Tufts University and there she created 0:47:29.400 --> 0:47:32.360 the Center for Race and Democracy, UH and what's interesting 0:47:32.400 --> 0:47:35.000 is I feel like diversity and inclusion, well, I don't 0:47:35.000 --> 0:47:38.200 feel like it truly has been a common threat of 0:47:38.239 --> 0:47:41.960 her academic and professional career, and she's now thinking about 0:47:42.000 --> 0:47:45.400 that big time. As head of Trinity, we are planning 0:47:45.760 --> 0:47:51.880 for a robust experience for our students, taking into consideration 0:47:52.320 --> 0:47:56.640 health and safety as a priority. Our students will be 0:47:56.760 --> 0:48:01.960 meeting regularly and have safe interaction ends with their professors, 0:48:02.000 --> 0:48:06.880 we think, with coaches and staff. We are also ready 0:48:07.280 --> 0:48:12.520 to pivot if we need to again to have remote learning. 0:48:13.200 --> 0:48:18.439 So we are preparing to engage our students in new 0:48:18.520 --> 0:48:23.440 and interesting ways, even if that needs to be remote. UM. 0:48:23.480 --> 0:48:28.160 We're planning to support them because they need help in 0:48:28.320 --> 0:48:32.680 figuring out how to navigate this new normal. And then 0:48:32.880 --> 0:48:35.920 you know, on a practical basis, of course, we are 0:48:35.960 --> 0:48:42.080 planning to have face coverings, physical distancing, reminders of hand washing, 0:48:42.520 --> 0:48:48.680 self monitoring of symptoms, and mandatory public health education for 0:48:48.760 --> 0:48:50.880 when they come back to campus. But you're going to 0:48:50.920 --> 0:48:55.000 be on campus. It is certainly our plan to be 0:48:55.120 --> 0:49:00.520 on campus. UM. We were very fortunate to Terman that 0:49:00.560 --> 0:49:08.480 we had seventeen hundred individual beds behind doors. Now sometimes 0:49:08.520 --> 0:49:12.880 it's off of a suite, but we had seventeen hundred 0:49:13.120 --> 0:49:17.520 UM individual bed spaces here at Trinity, and generally we 0:49:17.600 --> 0:49:22.000 have two thousand students, so that will allow our students 0:49:22.040 --> 0:49:27.120 to come back and UM also have UM private or 0:49:27.239 --> 0:49:31.440 individual rooms. And we thought, with those circumstances, and with 0:49:31.640 --> 0:49:35.359 the guidance that we've been provided by the State of Connecticut, 0:49:35.760 --> 0:49:40.360 that we are planning for a reopening, you know, recognizing 0:49:40.560 --> 0:49:45.280 of course that if conditions are such that we cannot 0:49:45.360 --> 0:49:49.560 open UM, you know, will have to then pivot to 0:49:49.840 --> 0:49:53.800 remote learning. And so, what are you hearing from students, 0:49:53.880 --> 0:49:58.160 especially incoming students sort of news of the first year students? 0:49:58.200 --> 0:50:01.720 I would imagine I have to think they're the most 0:50:02.200 --> 0:50:06.360 both apprehensive but also maybe the most eager at the 0:50:06.440 --> 0:50:10.400 same time, Joanta, what are the conversations like there with 0:50:10.480 --> 0:50:15.160 them and their parents? Right, It's it's amazing how eager 0:50:15.480 --> 0:50:19.399 they are to come to college. UM. We had one 0:50:19.600 --> 0:50:24.759 of our largest classes, more than six hundred students who 0:50:24.800 --> 0:50:30.319 accepted Trinity College, which we thought was surprising given the pandemic. 0:50:31.000 --> 0:50:34.959 But I think that people really want to come back. 0:50:35.040 --> 0:50:39.759 We did a survey of students and even before we 0:50:39.840 --> 0:50:43.120 had given them, you know what health and safety measures 0:50:43.160 --> 0:50:46.280 were going to look like, it's just what's your likelihood 0:50:46.480 --> 0:50:51.560 of coming back? And eighty five of our students and 0:50:51.719 --> 0:50:56.719 parents said they were either very likely or likely to 0:50:56.800 --> 0:51:01.920 come back. And then there was another, you know, almost 0:51:01.960 --> 0:51:05.319 ten percent that said, well, we're waiting to see you 0:51:05.360 --> 0:51:08.960 know what health and safety measures you have so people 0:51:09.480 --> 0:51:13.040 want to come back? Um. And I'll share with you 0:51:13.080 --> 0:51:18.520 that I'm the parent of a college age student. He 0:51:18.600 --> 0:51:21.160 wants to go back, and I want him to go 0:51:21.239 --> 0:51:27.800 back already. So are our students to go back? Aren't we? Joan? 0:51:28.200 --> 0:51:31.640 As you know, Jason has two teenagers um and also 0:51:31.680 --> 0:51:33.960 a little one, but two teenagers. He and I both 0:51:34.040 --> 0:51:36.640 have um kids who are going to be seniors in 0:51:36.760 --> 0:51:39.080 high school. And I gotta tell you, I cannot. I 0:51:39.120 --> 0:51:41.600 love my daughter, I cannot wait for her to kind 0:51:41.600 --> 0:51:44.120 of be back within school and she misses it a lot. 0:51:44.200 --> 0:51:48.480 So we totally get it. Absolutely. You know. When I 0:51:48.520 --> 0:51:51.520 talked to parents, they all get it and they laugh 0:51:51.640 --> 0:51:54.839 when I say, oh no, no, no, everybody one. Yeah, 0:51:55.600 --> 0:51:58.200 you're right there with him for sure. All right, So 0:51:58.560 --> 0:52:02.080 you're the first black and as female president of Trinity College, 0:52:02.600 --> 0:52:06.200 I'm sure you're getting questions like this all the time. 0:52:07.200 --> 0:52:08.840 What do we do to make this more than a moment? 0:52:09.200 --> 0:52:14.480 I think already it is more than a moment, And 0:52:14.760 --> 0:52:20.680 somehow people are listening to each other in a different manner, 0:52:21.040 --> 0:52:23.680 and that's strategy. College President Joanne Burger Sweeney. I love 0:52:23.760 --> 0:52:26.080 that conversation because she really does sit at the nexus 0:52:26.080 --> 0:52:29.440 of so many the most important social issues that we're facing, 0:52:29.440 --> 0:52:32.240 one of which Carol is getting kids back to school, 0:52:32.280 --> 0:52:36.439 but also big institutions dealing with some of the most 0:52:36.480 --> 0:52:38.640 important issues of our time. You can hear that whole 0:52:38.640 --> 0:52:42.000 conversation on our podcast feed. It's a great conversation and 0:52:42.040 --> 0:52:44.000 it came Jason in a week where we kept getting 0:52:44.040 --> 0:52:47.040 a lot of headlines from colleges and universities, including one 0:52:47.080 --> 0:52:50.160 from the IVY League right canceling sports competition for the 0:52:50.239 --> 0:52:53.840 upcoming semester because of health and safety concerns about the 0:52:53.880 --> 0:52:57.320 coronavirus pandemic. So a lot going on, certainly in that world. 0:52:57.600 --> 0:53:00.399 You're listening to Bloomberg Business Week coming up Broadway Dark 0:53:00.480 --> 0:53:02.200 for the rest of the year, We're going to check 0:53:02.200 --> 0:53:06.080 in with Broadway League President Charlotte st. Martin. This is Bloomberg, 0:53:08.640 --> 0:53:12.160 This is Bloomberg Business Week with Carol Masser and Jason 0:53:12.280 --> 0:53:15.920 Kelly from Bloomberg Radio on some of the most important, 0:53:15.960 --> 0:53:19.760 we hope informative conversations we've had recently on our daily 0:53:19.760 --> 0:53:22.759 Bloomberg Business Week Radio show. Carol, that's true, and a 0:53:22.800 --> 0:53:26.840 recent conversation had to do with New York City's famed Broadway. 0:53:26.880 --> 0:53:29.520 It's still dark, Jason. We know because of the pandemic, 0:53:29.560 --> 0:53:32.920 theaters staying closed for the rest of the year at least. 0:53:33.560 --> 0:53:35.960 But we caught up once again with the president of 0:53:35.960 --> 0:53:38.279 the Broadway League, Charlotte st. Martin, to find out what 0:53:38.400 --> 0:53:42.480 the outlook is. We either hire or are responsible for 0:53:42.800 --> 0:53:47.440 nine thousand jobs. That's the local restaurants, that's the retail 0:53:47.560 --> 0:53:51.960 stores in the area. That's the hotels, it's the museums 0:53:52.000 --> 0:53:55.960 and the vicinity, the parking garages, and they don't go 0:53:56.040 --> 0:53:59.520 back to work until Broadway goes back to work. So, uh, 0:53:59.560 --> 0:54:03.200 it's not just Broadway that's hurting, it's everybody that depends 0:54:03.200 --> 0:54:06.720 on Broadway. Yeah, I am curious some of the questions, 0:54:06.800 --> 0:54:08.919 you know, the conversations you guys are having, because it's 0:54:09.200 --> 0:54:10.560 you know, this comes in a week where we did 0:54:10.560 --> 0:54:14.399 talk to, you know, someone who manages a family owned 0:54:14.440 --> 0:54:16.920 hotel down in downtown New York, and you know what 0:54:16.960 --> 0:54:19.160 they're doing and I think Jason they said something like 0:54:19.160 --> 0:54:23.000 twenty or capacity, you know, and how they're doing things differently, 0:54:23.000 --> 0:54:25.640 and it is a very different experience in terms of 0:54:25.719 --> 0:54:29.960 shoes being cleaned and everything sanitized. There is there is 0:54:30.000 --> 0:54:35.080 just no way to do Broadway physically or financially right 0:54:35.160 --> 0:54:38.200 on a smaller scale of not really making the goal 0:54:38.480 --> 0:54:43.840 always filling as many seats as possible. That's correct. The 0:54:44.719 --> 0:54:49.600 We are a heavy, heavily unionized business, and we have 0:54:49.680 --> 0:54:52.560 the best theatrical employees in the world, but they're also 0:54:53.040 --> 0:54:57.600 the most expensive. And the costs of Broadway continue to 0:54:57.640 --> 0:55:02.120 skyrocket because the world exp access to deliver the best 0:55:02.160 --> 0:55:07.640 of everything, the best sets, the best digital technology, as 0:55:07.719 --> 0:55:12.120 well as the best actors, and it's it's an expensive 0:55:12.200 --> 0:55:17.520 business to run the The history has shown that in 0:55:17.560 --> 0:55:20.600 the best years, one out of four shows recoups on 0:55:20.640 --> 0:55:23.560 its investment, and for the long run it's one out 0:55:23.560 --> 0:55:27.800 of five shows recoup on their investments. So, uh, significantly 0:55:27.840 --> 0:55:34.279 reduced audience just doesn't work. If if we open and 0:55:35.080 --> 0:55:39.400 have audiences of or less, Broadway won't work. So we 0:55:39.520 --> 0:55:42.200 have to make sure that when we open, we have 0:55:42.320 --> 0:55:45.600 ticket sales to help keep the shows open, because it 0:55:45.640 --> 0:55:48.920 would be a disaster to have the shows open and 0:55:48.920 --> 0:55:53.360 then have to close three weeks later. Right, So, Charlotte, 0:55:53.640 --> 0:55:57.239 I wonder, because I know you're talking to producers and 0:55:57.440 --> 0:56:00.320 playwrights and all the folks who are on the aative 0:56:00.400 --> 0:56:03.759 side as well. I mean, what does this do for 0:56:04.480 --> 0:56:08.839 shows that were, you know, maybe not quite ready to go, 0:56:08.960 --> 0:56:11.960 but we're teed up to open in the second half 0:56:11.960 --> 0:56:14.839 of the year, or maybe some shows that that we're 0:56:14.840 --> 0:56:17.600 scheduled to open at the beginning of next year. Does 0:56:17.640 --> 0:56:21.279 everything get pushed? How many things just don't happen. What's 0:56:21.320 --> 0:56:24.959 your sense of how this sort of ripples through what 0:56:25.040 --> 0:56:28.080 we see when hopefully we are able to return to 0:56:28.160 --> 0:56:34.239 Broadway early next year. Well, I mean, fortunately, um, we 0:56:34.320 --> 0:56:38.080 have only had two shows that were too open right 0:56:38.160 --> 0:56:42.719 after we closed Broadway on March twelve, and one long 0:56:42.800 --> 0:56:46.319 running show, uh decide not to come back and that 0:56:46.400 --> 0:56:49.040 was frozen. And then there were the two that aren't 0:56:49.040 --> 0:56:52.680 going to be performing. But that leaves about thirty five 0:56:52.719 --> 0:56:56.719 shows that could be coming back when we reopen. And 0:56:56.800 --> 0:56:59.200 what happens is if they all come back, there won't 0:56:59.239 --> 0:57:02.719 be enough theater for the shows that we're coming in 0:57:02.840 --> 0:57:05.920 because many of the shows on Broadway are what you 0:57:06.000 --> 0:57:08.320 call limited runs. They say we're going to be running 0:57:08.360 --> 0:57:12.400 for twelve weeks or sixteen weeks. And if those shows 0:57:12.440 --> 0:57:14.440 do in fact come back, and we hope they do, 0:57:14.600 --> 0:57:18.840 then everything that was scheduled for January or the spring 0:57:19.400 --> 0:57:23.160 will be pushed back a bit. And we sure hope 0:57:23.200 --> 0:57:25.520 that all of those shows get to come back. Those 0:57:25.520 --> 0:57:29.840 people work four to six years, sometimes more to bring 0:57:29.920 --> 0:57:32.040 their show to Broadway, so we want them to have 0:57:32.160 --> 0:57:34.040 their day. I have to say I was kind of 0:57:34.080 --> 0:57:35.640 looking forward to it. I think it was going to 0:57:35.680 --> 0:57:38.360 be a limited run. Sara Disca Parker and Matthew broaderick Right, 0:57:38.600 --> 0:57:42.240 they were just about to open, weren't they They were, 0:57:42.280 --> 0:57:45.480 But they are scheduled to come back in the spring. Okay, 0:57:45.520 --> 0:57:49.040 that's good to hear local residents making good on their profits. Right, Yeah, 0:57:49.400 --> 0:57:53.280 exactly what happens? You know, I love you coming on 0:57:53.400 --> 0:57:57.000 because you do explain kind of the economics, um and 0:57:57.040 --> 0:57:59.720 you know of how Broadway works. What happens to all 0:57:59.760 --> 0:58:01.880 of the as workers. You say it's heavily unionized. Do 0:58:02.040 --> 0:58:05.840 they have they been getting payments of some sort or 0:58:05.920 --> 0:58:08.280 are they getting money from the government, Like, how does 0:58:08.320 --> 0:58:13.160 it work? What happens to those workers? Well, when we shuttered, 0:58:13.920 --> 0:58:16.200 we've paid the workers for two and a half weeks, 0:58:16.880 --> 0:58:20.720 and then healthcare was covered for longer than that, and 0:58:21.200 --> 0:58:25.320 many of the unions are getting healthcare coverage still, and 0:58:25.480 --> 0:58:30.920 many are getting unemployment insurance. But there's no question everyone 0:58:30.960 --> 0:58:35.240 on Broadway, producers, the people that work in the producer's office, 0:58:35.280 --> 0:58:39.200 the people that work in theaters, everyone is UH is 0:58:39.280 --> 0:58:44.640 experiencing difficulty. I mean most people think Broadway wow big business, 0:58:44.840 --> 0:58:50.000 big big corporations. Broadway is made up of hundreds of 0:58:50.160 --> 0:58:54.280 small little businesses that put everything they have to bring 0:58:54.320 --> 0:58:57.160 their show to Broadway. I mean, yes, you have Disney 0:58:57.280 --> 0:59:01.320 and a couple of other big shows that UH big 0:59:01.360 --> 0:59:04.440 companies that bring their shows to Broadway, but most are 0:59:04.840 --> 0:59:09.520 small entrepreneurial businesses and they're all suffering as well as 0:59:09.720 --> 0:59:14.720 the actors and stage hands and designers. There's nothing good 0:59:14.720 --> 0:59:18.080 about this shutdown. And Charlotte, you know, one of the 0:59:18.120 --> 0:59:20.600 things we talked about the last time you were with 0:59:20.680 --> 0:59:24.640 us was, you know, obviously you have UH a window 0:59:24.680 --> 0:59:28.320 into this through the touring companies as well. I mean, 0:59:28.480 --> 0:59:32.120 this is a national epidemic and we're seeing it really 0:59:32.200 --> 0:59:34.760 flare up in a lot of different places. I know, 0:59:34.920 --> 0:59:37.160 I believe if I remember, you hail from Dallas, so 0:59:37.280 --> 0:59:40.880 you understand all different parts of the of the country. 0:59:41.360 --> 0:59:44.280 How is the touring business looking amid all of this? 0:59:44.480 --> 0:59:47.040 Is it completely shut down as well? Are you seeing 0:59:47.200 --> 0:59:52.080 any movement there? Broadway tours are in two hundred and 0:59:52.120 --> 0:59:56.480 forty two cities around our country, and they're all shuttered. 0:59:57.280 --> 1:00:03.920 The one s glimmer of hope is many of the 1:00:03.960 --> 1:00:08.640 other markets where the Broadway shows two or two we're 1:00:08.680 --> 1:00:11.840 not as heavily hit by the virus. So there is 1:00:11.920 --> 1:00:15.640 some thought that some some of the cities can open 1:00:15.720 --> 1:00:19.800 up before the end of the year. And most of 1:00:19.800 --> 1:00:23.160 our cities are not as dependent on tourism as New 1:00:23.200 --> 1:00:27.440 York City is. They have subscribers, and subscribers are very 1:00:27.560 --> 1:00:30.280 loyal to their theater. I mean, I didn't miss a 1:00:30.480 --> 1:00:33.560 show at the Dallas Summer Musicals for as long as 1:00:33.600 --> 1:00:37.160 I could remember, because that's where I learned to love Broadway, 1:00:37.200 --> 1:00:39.960 and that's that's the way people are in many of 1:00:40.000 --> 1:00:44.040 the markets across the country. So hopefully we will get 1:00:44.080 --> 1:00:46.400 some of those people back to work before the end 1:00:46.400 --> 1:00:49.240 of the year. Do you see it as it's not 1:00:49.320 --> 1:00:53.120 until we get a vaccine or at least treatment modalities 1:00:53.160 --> 1:00:55.640 that can treat people who ultimately get the virus to 1:00:55.720 --> 1:00:58.280 keep you know, so that they they may get the virus, 1:00:58.280 --> 1:01:02.080 but they can take something that mitigates the symptoms and 1:01:02.120 --> 1:01:05.040 the outcomes. Is that is that what will ultimately open 1:01:05.120 --> 1:01:10.920 up Broadway Charlotte, Well, we do not believe that we 1:01:11.000 --> 1:01:13.680 have to have the vaccine to open It will be 1:01:13.720 --> 1:01:17.240 great to have it, but the medical professionals that we're 1:01:17.280 --> 1:01:22.040 working with say that many other protocols that are coming 1:01:22.080 --> 1:01:27.360 close to being real would allow us to come back. Certainly, 1:01:27.920 --> 1:01:30.920 the most critical thing for the cast and crew is 1:01:31.000 --> 1:01:37.360 the instant testing, because there is no way that these 1:01:37.440 --> 1:01:40.800 performers can and stage hands and the people that work 1:01:40.880 --> 1:01:45.000 backstage can come back and we not be assured every 1:01:45.040 --> 1:01:49.439 single day that they're healthy. Because if you've never been 1:01:49.440 --> 1:01:53.400 in backstage of a Broadway theater, these are historic buildings 1:01:53.440 --> 1:01:56.560 that are spectacular, but they're not the biggest backstage areas 1:01:56.600 --> 1:02:01.200 you've ever seen. So uh, we have to have the 1:02:01.320 --> 1:02:05.680 testing that is reliable and we're getting good indications that 1:02:05.760 --> 1:02:10.080 those will be available to us. Plus, there are protocols 1:02:10.160 --> 1:02:14.320 being developed all around the world that we're obviously watching 1:02:14.360 --> 1:02:19.439 and paying attention to at theaters of Global Community, and 1:02:19.640 --> 1:02:24.560 Broadway travels around the world, and the world travels to Broadway, 1:02:24.760 --> 1:02:30.280 so we're all sharing information, and our medical experts are 1:02:30.320 --> 1:02:35.560 telling us that they have cautious optimism that we can 1:02:35.640 --> 1:02:38.520 come back after the first of the year, not telling 1:02:38.640 --> 1:02:42.800 us exactly what, but after the first and uh, and 1:02:42.920 --> 1:02:46.040 we're hoping for that to be the case. As we 1:02:46.120 --> 1:02:49.320 all know, we find out new things about this virus. 1:02:49.520 --> 1:02:53.360 Seems like every week. Sometimes it's positive and sometimes it's not. 1:02:54.120 --> 1:02:57.400 So we're very dependent on the good news. That's President 1:02:57.440 --> 1:02:59.760 of the Broadway League, Charlotte st. Martin, and you know, 1:03:00.120 --> 1:03:04.160 since she often reminds us that it's not just about 1:03:04.200 --> 1:03:07.400 the folks up on stage are behind the curtain, but 1:03:07.560 --> 1:03:11.800 it's a whole industry restaurants, right, and everything in New 1:03:11.880 --> 1:03:16.120 York City that supports the theater industry. So it really 1:03:16.120 --> 1:03:18.600 has a big impact on the city economy and really 1:03:18.640 --> 1:03:21.320 the national economy. Yeah, the national economy as well. I mean, 1:03:21.360 --> 1:03:24.640 don't forget you know, they're touring shows that are you know, 1:03:24.720 --> 1:03:28.160 coming to theaters near you usually uh, and that whole 1:03:28.160 --> 1:03:32.320 business is largely shut down. We hope Broadway is back soon. Well, 1:03:32.320 --> 1:03:34.360 that wraps up the weekend addition to Bloomberg Business Week 1:03:34.360 --> 1:03:36.280 from Bloomberg Radio. Thank you so much for joining us. 1:03:36.320 --> 1:03:38.440 I'm Jason Kelly and I'm Carol Master. Be sure to 1:03:38.480 --> 1:03:41.200 tune into Bloomberg Business Week Radio Live Monday through Friday 1:03:41.240 --> 1:03:43.560 starting at two pm Wall Street Time. And if you 1:03:43.600 --> 1:03:46.360 can't catch us live, find us on your podcast feed. 1:03:46.400 --> 1:03:49.560 Subscribe to Bloomberg Business Week wherever you get your podcasts. 1:03:49.840 --> 1:03:52.080 You can get the full conversations like the ones we 1:03:52.080 --> 1:03:55.080 had with Charlotte Saint Martin, Joanne Burger Sweeney. You can 1:03:55.160 --> 1:03:58.160 also hear the in depth conversations we have on our 1:03:58.240 --> 1:04:01.040 daily show with some of our best experts like Craig 1:04:01.080 --> 1:04:04.200 Gordon are Washington Bureau chief and Kate Crater, our food 1:04:04.280 --> 1:04:07.680 editor at Bloomberg Business Week. And check out our extra podcast. Jason, 1:04:07.680 --> 1:04:09.959 we caught up a chef and restaurant toward Danielle Blue 1:04:10.280 --> 1:04:14.280 talked with us about offering up Danielle Blue Kitchen. He 1:04:14.440 --> 1:04:17.200 likes so many in the restaurant industry, pivoting to bring 1:04:17.200 --> 1:04:20.040 back customers, and don't forget. Also, you can watch the 1:04:20.040 --> 1:04:23.160 show live on YouTube. Just search for Bloomberg Global News. 1:04:23.320 --> 1:04:25.960 We'll be back right here next week at the same time. 1:04:26.280 --> 1:04:27.400 This is Bloomberg