WEBVTT - Walmart CEO Retires, US Head to Lead Retailer Into AI Age 

0:00:02.759 --> 0:00:10.600
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to the

0:00:10.640 --> 0:00:14.600
<v Speaker 1>Bloomberg Intelligence podcast. Catch us live weekdays at ten am

0:00:14.640 --> 0:00:17.880
<v Speaker 1>easterne on Apple, Cocklay and Android Auto with the Bloomberg

0:00:17.960 --> 0:00:21.080
<v Speaker 1>Business app. Listen on demand wherever you get your podcasts,

0:00:21.400 --> 0:00:23.079
<v Speaker 1>or watch us live on YouTube.

0:00:23.800 --> 0:00:25.760
<v Speaker 2>All right, there's been a lot of US CEO changes

0:00:25.760 --> 0:00:28.560
<v Speaker 2>in the telecom space lately, Paul, but now we're getting

0:00:28.560 --> 0:00:33.200
<v Speaker 2>one in the retail space. The biggest retailer, walmart announcing

0:00:33.320 --> 0:00:36.879
<v Speaker 2>CEO Doug McMillan will retire in February and he will

0:00:36.920 --> 0:00:41.320
<v Speaker 2>be replaced by the current head of walmart Us, Jen Bartash,

0:00:41.360 --> 0:00:44.640
<v Speaker 2>has covers retail, staples and packagews for us here at

0:00:44.640 --> 0:00:48.599
<v Speaker 2>Bloomberg Intelligence. Jen, was this a surprise or was this

0:00:48.760 --> 0:00:50.760
<v Speaker 2>a finely planned succession plan?

0:00:52.240 --> 0:00:55.200
<v Speaker 3>Good morning? So it's the surprise is really only in

0:00:55.240 --> 0:00:57.480
<v Speaker 3>the timing, not in the selection of who is actually

0:00:57.520 --> 0:01:00.600
<v Speaker 3>going to succeed Doug McMillan. So, well, you know, John

0:01:00.640 --> 0:01:03.120
<v Speaker 3>Ferner has been in a position for the last six

0:01:03.200 --> 0:01:06.959
<v Speaker 3>years as CEO of walmart Us. Everyone has presumed that

0:01:07.000 --> 0:01:09.240
<v Speaker 3>he would be the heir apparent to the CEO role,

0:01:09.959 --> 0:01:12.440
<v Speaker 3>So it's really just a matter of the timing of

0:01:12.480 --> 0:01:15.080
<v Speaker 3>it that has caught people a little bit by surprise.

0:01:15.160 --> 0:01:21.479
<v Speaker 4>Today I'm looking at this guy, the mister McMillan. He's

0:01:21.480 --> 0:01:23.640
<v Speaker 4>only fifty nine years old. Now what I mean is

0:01:23.720 --> 0:01:25.960
<v Speaker 4>this this isn't that's kind of young, right.

0:01:27.200 --> 0:01:29.760
<v Speaker 3>It is reasonably young. He's been at the Helm since

0:01:29.760 --> 0:01:33.840
<v Speaker 3>twenty fourteen, you know, and I will say to his credit,

0:01:33.920 --> 0:01:38.720
<v Speaker 3>you know, he's really implemented a cultural change at Walmart.

0:01:39.360 --> 0:01:42.960
<v Speaker 3>If you think back to you know, the the early knots,

0:01:43.000 --> 0:01:45.560
<v Speaker 3>you know, Walmart had a bit of a reputation as

0:01:45.560 --> 0:01:48.680
<v Speaker 3>maybe a bully with some of their suppliers and partners,

0:01:48.800 --> 0:01:52.040
<v Speaker 3>you know, and the culture has really evolved to where

0:01:52.880 --> 0:01:55.360
<v Speaker 3>it's much more of a technology led company. They're willing

0:01:55.440 --> 0:01:59.080
<v Speaker 3>to experiment. They try, they fail, they move on. They've

0:01:59.160 --> 0:02:02.080
<v Speaker 3>tried different strategez. They're not afraid to back away when

0:02:02.080 --> 0:02:04.880
<v Speaker 3>they're not panning out and to delve into something new.

0:02:05.240 --> 0:02:08.960
<v Speaker 3>And that cultural shift really is attributed to Doug McMillan.

0:02:09.919 --> 0:02:12.880
<v Speaker 3>And you know, as as for the timing, you know,

0:02:13.360 --> 0:02:15.560
<v Speaker 3>it just maybe he feels that it's his time to

0:02:16.880 --> 0:02:18.760
<v Speaker 3>have left his mark on the company and move on.

0:02:20.040 --> 0:02:22.320
<v Speaker 2>What does this mean for a company? Like Target or

0:02:22.360 --> 0:02:24.560
<v Speaker 2>anyone else that competes with Walmart. Does this present an

0:02:24.600 --> 0:02:28.639
<v Speaker 2>opportunity or are things just go exactly as they were

0:02:28.639 --> 0:02:32.400
<v Speaker 2>at Walmart, where the strategy remains consistent and there's no

0:02:32.480 --> 0:02:35.440
<v Speaker 2>real entry point for someone who has maybe been and

0:02:35.520 --> 0:02:37.720
<v Speaker 2>also ran to kind of close the gap.

0:02:38.919 --> 0:02:41.120
<v Speaker 3>I think that's a great question. And when it comes

0:02:41.120 --> 0:02:45.160
<v Speaker 3>to tactics, we're not expecting any major pivot and strategy

0:02:45.480 --> 0:02:48.440
<v Speaker 3>by John Ferner when he takes over as CEO. But

0:02:48.600 --> 0:02:51.000
<v Speaker 3>to be fair, I mean, Walmart is firing on all

0:02:51.040 --> 0:02:54.240
<v Speaker 3>cylinders at the moment, and they're gaining market share, they're

0:02:54.280 --> 0:02:57.000
<v Speaker 3>growing their top line, growing their profits, so they're doing

0:02:57.080 --> 0:03:00.600
<v Speaker 3>quite well. That said, you know, at TAR we also

0:03:00.639 --> 0:03:03.600
<v Speaker 3>had a new CEO announced not long ago, you know,

0:03:03.680 --> 0:03:07.000
<v Speaker 3>and for Michael Fidelke, who's who's moving into the CEO role,

0:03:07.240 --> 0:03:11.360
<v Speaker 3>it's much more about the focus on targets, transformation and

0:03:11.720 --> 0:03:16.440
<v Speaker 3>you know, and and a transfer a turnaround plan. Now,

0:03:16.480 --> 0:03:19.280
<v Speaker 3>whether that presents an opportunity with a change at Walmart

0:03:19.480 --> 0:03:21.959
<v Speaker 3>as well, that's a little hard to a little hard

0:03:22.000 --> 0:03:24.440
<v Speaker 3>to say, because you know, I think first, Target's got

0:03:24.440 --> 0:03:26.560
<v Speaker 3>to get their house in order before they go after

0:03:26.639 --> 0:03:29.359
<v Speaker 3>other people's other people's houses as well.

0:03:30.120 --> 0:03:33.200
<v Speaker 4>All Right, So stepping back here, what's the play for Walmart?

0:03:33.240 --> 0:03:35.800
<v Speaker 4>If you're an investor in Walmart today? Why are you

0:03:35.840 --> 0:03:37.240
<v Speaker 4>in an investor in Walmart today?

0:03:38.320 --> 0:03:41.840
<v Speaker 3>Well, you know, Walmart is is has done an admirable

0:03:41.920 --> 0:03:46.200
<v Speaker 3>job of you know, increasing the breadth of their business

0:03:46.240 --> 0:03:50.560
<v Speaker 3>while simultaneously becoming more focused. If you think over the

0:03:50.640 --> 0:03:55.080
<v Speaker 3>last several years, they've they've shed they've exited some of

0:03:55.080 --> 0:03:58.800
<v Speaker 3>their international markets where they weren't performing well. They've really

0:03:58.840 --> 0:04:02.600
<v Speaker 3>focused on technology, the implementation of things like AI to

0:04:02.720 --> 0:04:06.040
<v Speaker 3>support their business. Their digital sales growth is growing, the

0:04:06.080 --> 0:04:10.960
<v Speaker 3>marketplace for for for online sales is growing. So you know,

0:04:11.400 --> 0:04:14.280
<v Speaker 3>when you look at it from an investor perspective, there

0:04:14.320 --> 0:04:17.400
<v Speaker 3>are a lot of things that are happening at Walmart

0:04:17.760 --> 0:04:21.560
<v Speaker 3>that should lead to consistent future growth. And you know

0:04:21.640 --> 0:04:27.000
<v Speaker 3>that also includes, you know, a lot of the It

0:04:27.320 --> 0:04:31.279
<v Speaker 3>includes the efforts that they're making to bring higher income

0:04:31.320 --> 0:04:36.240
<v Speaker 3>households into their into their into their group and and

0:04:36.279 --> 0:04:40.239
<v Speaker 3>if they're able to successfully retain those households going forward,

0:04:41.080 --> 0:04:43.840
<v Speaker 3>that just sets up a whole new wave of potential

0:04:43.839 --> 0:04:46.839
<v Speaker 3>growth for for for Walmart in the long run. With

0:04:46.960 --> 0:04:50.720
<v Speaker 3>a much more robust or customer. And so those those

0:04:50.720 --> 0:04:53.640
<v Speaker 3>are the kinds of things where you look at them

0:04:53.680 --> 0:04:56.280
<v Speaker 3>and you look at them relative to competitors, and how

0:04:56.279 --> 0:05:00.160
<v Speaker 3>those those peers are valued. And although you know, from

0:05:00.200 --> 0:05:03.960
<v Speaker 3>a evaluation perspective, you know Walmart is, you know, more

0:05:03.960 --> 0:05:06.479
<v Speaker 3>expensive than it had been, there's still a lot of

0:05:06.520 --> 0:05:07.559
<v Speaker 3>opportunity to grow.

0:05:08.560 --> 0:05:09.240
<v Speaker 1>Stay with us.

0:05:09.360 --> 0:05:11.640
<v Speaker 4>More from Bloomberg Intelligence coming up after this.

0:05:15.279 --> 0:05:18.960
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us Live

0:05:19.040 --> 0:05:22.120
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:05:22.160 --> 0:05:25.440
<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

0:05:25.520 --> 0:05:28.640
<v Speaker 1>you get your podcasts, or watch us live on YouTube.

0:05:29.400 --> 0:05:32.320
<v Speaker 2>Let's move now to the pharmaceutical sector with a big

0:05:32.360 --> 0:05:35.240
<v Speaker 2>purchase here by Murk, a nine point two billion dollar

0:05:35.360 --> 0:05:39.440
<v Speaker 2>purchase of Sidara Therapeutics for twenty one excuse me, two

0:05:39.520 --> 0:05:42.599
<v Speaker 2>hundred and twenty one fifty a share in cash. Madison

0:05:42.640 --> 0:05:45.360
<v Speaker 2>Muller is our Bloomberg News healthcare reporter and she joins

0:05:45.440 --> 0:05:48.240
<v Speaker 2>us now and Madison this is all about filling the

0:05:48.640 --> 0:05:52.080
<v Speaker 2>pipeline because Murk is losing patent protection on one of

0:05:52.160 --> 0:05:53.720
<v Speaker 2>its blockbuster drugs.

0:05:53.440 --> 0:05:56.359
<v Speaker 5>Exactly, and this is sort of the perpetual problem for

0:05:56.360 --> 0:06:00.279
<v Speaker 5>pharmaceutical companies is that they face these patents for huge

0:06:00.279 --> 0:06:03.840
<v Speaker 5>blockbusters that end up accounting for a large majority of

0:06:03.920 --> 0:06:07.200
<v Speaker 5>their sales. I mean, in Merk's case, almost half the

0:06:07.200 --> 0:06:10.320
<v Speaker 5>company's revenue last year came from Katruda, which is facing

0:06:10.320 --> 0:06:13.120
<v Speaker 5>a patent expiration in twenty twenty eight. This is a

0:06:13.120 --> 0:06:16.560
<v Speaker 5>cancer drug, one of the best selling pharmaceutical products of

0:06:16.600 --> 0:06:20.479
<v Speaker 5>all time, and so Merk has been looking for other

0:06:20.600 --> 0:06:23.520
<v Speaker 5>products to replenish its pipeline. Like you said, this is

0:06:23.560 --> 0:06:26.440
<v Speaker 5>one of them. They did another deal earlier this year,

0:06:26.480 --> 0:06:29.920
<v Speaker 5>and so looking to flu treatments, which flu even though

0:06:29.920 --> 0:06:33.920
<v Speaker 5>we have vaccines, anti virals for the vaccines are effective,

0:06:34.000 --> 0:06:37.919
<v Speaker 5>but for a long time, scientists, researchers, drug makers have

0:06:38.000 --> 0:06:41.680
<v Speaker 5>been hunting for more effective and different products to help

0:06:41.720 --> 0:06:44.680
<v Speaker 5>prevent the flu, which lots of Americans die from still

0:06:44.720 --> 0:06:45.120
<v Speaker 5>each year.

0:06:45.720 --> 0:06:48.120
<v Speaker 4>So where would keep Where would Mark like to be

0:06:48.240 --> 0:06:51.240
<v Speaker 4>in terms of I mean, I guess when you're thinking back,

0:06:51.400 --> 0:06:53.520
<v Speaker 4>having half your sales tied to one drug, well, it's

0:06:53.520 --> 0:06:56.000
<v Speaker 4>a great drug and it's all good. That's probably not

0:06:56.040 --> 0:06:58.400
<v Speaker 4>what you want from a diversification standpoint. What does Merk

0:06:58.480 --> 0:06:59.800
<v Speaker 4>say about what they'd like to be?

0:07:00.440 --> 0:07:03.159
<v Speaker 5>Yeah, I mean It's interesting because a lot of pharma

0:07:03.560 --> 0:07:06.200
<v Speaker 5>companies end up facing this problem. I mean, we look

0:07:06.200 --> 0:07:09.640
<v Speaker 5>at Nova Nordisk, and they have they're facing a similar issue.

0:07:09.640 --> 0:07:13.240
<v Speaker 5>I mean, they're not necessarily looking at patent expirations, but

0:07:13.400 --> 0:07:16.240
<v Speaker 5>they're looking at government price negotiations and cuts for their

0:07:16.280 --> 0:07:19.440
<v Speaker 5>best selling drugs, Ozebic and Wagovi. The majority of their

0:07:19.480 --> 0:07:22.120
<v Speaker 5>sales come from those products, and so a lot of

0:07:22.160 --> 0:07:25.600
<v Speaker 5>times pharmaceutical companies end up in this situation where they

0:07:25.640 --> 0:07:28.920
<v Speaker 5>have one product accounting for the majority of sales. And so,

0:07:29.640 --> 0:07:32.800
<v Speaker 5>you know, Merk is not taking this approach to like

0:07:32.880 --> 0:07:35.560
<v Speaker 5>looking to just one company, you know, big deal one

0:07:35.680 --> 0:07:39.440
<v Speaker 5>company to get another blockbuster to replace ki Truda. They're

0:07:39.480 --> 0:07:42.240
<v Speaker 5>looking to have sort of one analyst, which we have

0:07:42.280 --> 0:07:44.160
<v Speaker 5>in the story called it a string of pearls M

0:07:44.240 --> 0:07:47.080
<v Speaker 5>and a approach you know, looking to more like bite

0:07:47.120 --> 0:07:51.160
<v Speaker 5>sized deals to sort of diversify that it's pipeline and

0:07:51.560 --> 0:07:54.920
<v Speaker 5>look to a couple different products to hopefully, you know,

0:07:54.960 --> 0:07:58.880
<v Speaker 5>replenish that. Abvi was in a similar situation with its

0:07:58.880 --> 0:08:01.920
<v Speaker 5>best selling drug human Era, and they now have and

0:08:01.960 --> 0:08:05.160
<v Speaker 5>that was an arthritis drug. They now have two arthritis

0:08:05.200 --> 0:08:07.680
<v Speaker 5>treatments that are sort of accounting for like half and

0:08:07.760 --> 0:08:11.120
<v Speaker 5>half of what Humaira was bringing in. So it's interesting

0:08:11.160 --> 0:08:13.840
<v Speaker 5>and all the pharmaceutical companies are sort of taking different

0:08:13.920 --> 0:08:16.680
<v Speaker 5>approaches to how they're doing but how they're doing it,

0:08:16.720 --> 0:08:18.760
<v Speaker 5>But it seems like sort of doing this string of

0:08:18.800 --> 0:08:21.480
<v Speaker 5>pearls approach, having a couple of different products is the

0:08:21.520 --> 0:08:23.160
<v Speaker 5>way that they're thinking about it right now.

0:08:23.280 --> 0:08:25.680
<v Speaker 2>I feel like I remember that once upon a time,

0:08:25.960 --> 0:08:27.920
<v Speaker 2>a lot of these companies that were losing patent protection

0:08:28.000 --> 0:08:30.520
<v Speaker 2>on their drugs would come out with like a tweak

0:08:30.640 --> 0:08:33.360
<v Speaker 2>to the drug. You know, maybe it's in gel capsule

0:08:33.400 --> 0:08:35.720
<v Speaker 2>form as opposed to tablet form, and that would you know,

0:08:35.760 --> 0:08:38.000
<v Speaker 2>extend the patent for a little bit longer. Is that

0:08:38.080 --> 0:08:39.199
<v Speaker 2>something that they still do?

0:08:39.440 --> 0:08:41.559
<v Speaker 5>Yeah, I mean it is. It's definitely something that they

0:08:41.600 --> 0:08:44.760
<v Speaker 5>still do. There are lots of ways to extend a patent,

0:08:45.400 --> 0:08:49.800
<v Speaker 5>you know, getting a new indication for pediatrics or different

0:08:49.800 --> 0:08:54.079
<v Speaker 5>formulations or combinations, but again, it sort of only gives

0:08:54.120 --> 0:08:57.400
<v Speaker 5>you a couple more years. It doesn't extend the product's

0:08:57.400 --> 0:08:59.960
<v Speaker 5>lifeline by like another ten years, which that's what we're

0:09:00.040 --> 0:09:03.240
<v Speaker 5>looking at, where these companies have to think decades, you know,

0:09:03.400 --> 0:09:06.880
<v Speaker 5>maybe a decade or more in advance about what's happening

0:09:06.880 --> 0:09:09.680
<v Speaker 5>in terms of their pipeline. So while that's somewhat of

0:09:09.720 --> 0:09:12.520
<v Speaker 5>a temporary solution or something that can be done earlier

0:09:12.520 --> 0:09:14.760
<v Speaker 5>in a product's lifeline, it's like, once you get to

0:09:14.800 --> 0:09:17.160
<v Speaker 5>this point where it's sort of crunch time, they need

0:09:17.200 --> 0:09:19.400
<v Speaker 5>to be thinking about what more can we bring in

0:09:19.440 --> 0:09:21.360
<v Speaker 5>to make up for this is.

0:09:21.360 --> 0:09:24.000
<v Speaker 4>The Trump administration and the regulators. Are they okay with

0:09:24.040 --> 0:09:26.000
<v Speaker 4>these deals? I mean, do they ever challenge any of

0:09:26.040 --> 0:09:28.360
<v Speaker 4>these deals or are they kind of under the radar.

0:09:28.640 --> 0:09:30.880
<v Speaker 5>So far it's sort of under the radar. I mean,

0:09:30.960 --> 0:09:34.000
<v Speaker 5>this one's interesting. Actually, there was another analyst note this

0:09:34.080 --> 0:09:37.920
<v Speaker 5>morning about how they don't think that the FTC per se,

0:09:37.960 --> 0:09:41.079
<v Speaker 5>we'll have a problem with this deal. But it's interesting

0:09:41.200 --> 0:09:44.080
<v Speaker 5>to do a deal in the infectious disease space given

0:09:44.440 --> 0:09:48.160
<v Speaker 5>the Department of Health and Human Services stands on vaccines

0:09:48.200 --> 0:09:51.160
<v Speaker 5>infectious disease right now, and while this isn't a vaccine,

0:09:51.559 --> 0:09:54.400
<v Speaker 5>it's just an interesting time in that space in general.

0:09:54.520 --> 0:09:58.040
<v Speaker 5>So while there might not be additional FTC scrutiny, it

0:09:58.160 --> 0:10:00.839
<v Speaker 5>might be something. And you know, again this is sort

0:10:00.840 --> 0:10:03.439
<v Speaker 5>of hypothetical, but just like given the climate right now,

0:10:03.679 --> 0:10:06.840
<v Speaker 5>is something that HHS could potentially keep an eye on

0:10:06.920 --> 0:10:07.439
<v Speaker 5>or look at.

0:10:08.679 --> 0:10:11.840
<v Speaker 4>Stay with us. More from Bloomberg Intelligence coming up after this.

0:10:15.720 --> 0:10:19.439
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:10:19.520 --> 0:10:22.200
<v Speaker 1>weekdays at ten am. He's done on Apple, Cocklay and

0:10:22.200 --> 0:10:25.480
<v Speaker 1>Android Auto with the Bloomberg Business app. Listen on demand

0:10:25.520 --> 0:10:29.040
<v Speaker 1>wherever you get your podcasts, or watch us live on YouTube.

0:10:29.880 --> 0:10:32.040
<v Speaker 4>A lot of news into telecomspaceically, we had a lot

0:10:32.040 --> 0:10:35.440
<v Speaker 4>of change in the CEO suite. We've got a lot

0:10:35.480 --> 0:10:38.120
<v Speaker 4>of stuff happening here. Verizon's out with a big story

0:10:38.160 --> 0:10:40.840
<v Speaker 4>I want to get to about cutting costs there. John

0:10:40.840 --> 0:10:43.800
<v Speaker 4>Butler joins us. He covers all the telecom stuff for

0:10:43.960 --> 0:10:48.439
<v Speaker 4>Bloomberg Intelligence. Let's start with Verizon here planning to cut

0:10:48.480 --> 0:10:53.040
<v Speaker 4>about fifteen thousand jobs. It's about fifteen percent of the workforce.

0:10:53.120 --> 0:10:54.720
<v Speaker 4>I mean, this is big. What's going on?

0:10:55.040 --> 0:10:58.400
<v Speaker 6>That is a lot. So they have a new CEO,

0:10:58.520 --> 0:11:01.560
<v Speaker 6>Dan Shalman. He's been on the board for a long time,

0:11:01.840 --> 0:11:04.120
<v Speaker 6>so he's had a front row seat to what Hans

0:11:04.200 --> 0:11:08.880
<v Speaker 6>Vesperg was doing. And his feeling was that Vesperg who

0:11:09.000 --> 0:11:12.440
<v Speaker 6>was leaning into a network first strategy. So he was

0:11:12.480 --> 0:11:16.680
<v Speaker 6>out there telling everyone Verizon has the best network. It's

0:11:16.720 --> 0:11:19.079
<v Speaker 6>the only reason to be with us. It's the best

0:11:19.120 --> 0:11:22.240
<v Speaker 6>reason to be with us, and it just wasn't resonating.

0:11:22.320 --> 0:11:25.120
<v Speaker 6>I think Shulman saw it and said, we need to

0:11:25.120 --> 0:11:29.480
<v Speaker 6>be consumer first, not network first. So he took over.

0:11:29.760 --> 0:11:32.760
<v Speaker 6>I think it was October third, at the beginning of October.

0:11:33.440 --> 0:11:36.600
<v Speaker 6>He's new at the company, but again, I'm sorry he's

0:11:36.640 --> 0:11:39.079
<v Speaker 6>new in the role, but he's not new at the company,

0:11:39.120 --> 0:11:42.720
<v Speaker 6>and so I think my hope is at least that

0:11:42.800 --> 0:11:47.000
<v Speaker 6>these cuts are carefully considered, because just as you say,

0:11:47.080 --> 0:11:50.520
<v Speaker 6>with cutting fifteen to twenty percent of the workforce at

0:11:50.559 --> 0:11:55.360
<v Speaker 6>a telecom risk cutting into bone, not just not just fat.

0:11:55.440 --> 0:11:57.920
<v Speaker 4>And he was at at and T before. He's this

0:11:57.960 --> 0:11:59.080
<v Speaker 4>is a telecom guy, right.

0:11:59.120 --> 0:12:02.800
<v Speaker 6>He was at Virgin Mobile too. He has telecom experience,

0:12:03.559 --> 0:12:07.280
<v Speaker 6>and he also helped to sort of pull PayPal out

0:12:07.280 --> 0:12:11.040
<v Speaker 6>of the dredges. I think they headed back there during

0:12:11.080 --> 0:12:13.600
<v Speaker 6>his tenure as well. So it was a little bit

0:12:13.640 --> 0:12:17.360
<v Speaker 6>of a controversial ride for him there, But I think

0:12:17.400 --> 0:12:21.320
<v Speaker 6>he has the kind of telecom experience and board experience

0:12:21.320 --> 0:12:26.719
<v Speaker 6>at Verizon to bring some changes to the organization. When

0:12:26.760 --> 0:12:31.319
<v Speaker 6>I talked to the company about his naming as CEO.

0:12:32.120 --> 0:12:35.120
<v Speaker 6>The answer was, we're bringing him in as a change agent.

0:12:35.360 --> 0:12:37.120
<v Speaker 6>We really need shake up here.

0:12:37.440 --> 0:12:39.959
<v Speaker 4>For and that's an industry that could probably use it

0:12:40.000 --> 0:12:42.079
<v Speaker 4>a little bit. I mean, John Ledger T Mobile did

0:12:42.080 --> 0:12:43.440
<v Speaker 4>such a great job as a change.

0:12:43.400 --> 0:12:47.600
<v Speaker 6>He did, so what he recognized is that consumer wireless

0:12:48.400 --> 0:12:52.199
<v Speaker 6>is a consumer retail business, right. They have brand spokespeople,

0:12:52.280 --> 0:12:55.760
<v Speaker 6>they advertise on the Super Bowl, they have free Tuesday,

0:12:55.920 --> 0:13:01.840
<v Speaker 6>you know, tea Mobile Tuesday giveaways, and Verizon seems off

0:13:01.920 --> 0:13:05.480
<v Speaker 6>base there. I don't think they really hit the ball

0:13:05.520 --> 0:13:09.200
<v Speaker 6>well when it comes to being in the consumer retail

0:13:09.240 --> 0:13:09.920
<v Speaker 6>business and.

0:13:09.800 --> 0:13:12.560
<v Speaker 4>They think they think my thing is they always they're

0:13:12.800 --> 0:13:15.120
<v Speaker 4>a bell company, so they have some of that legacy.

0:13:15.559 --> 0:13:18.839
<v Speaker 6>Yeah, it's in the culture there and hopefully Shulman can

0:13:18.960 --> 0:13:22.959
<v Speaker 6>sort of instill that excitement in the consumer. That's his

0:13:23.080 --> 0:13:23.959
<v Speaker 6>big challenge.

0:13:23.800 --> 0:13:25.679
<v Speaker 4>But I mean that's a business, the wireless business, that's

0:13:25.679 --> 0:13:28.680
<v Speaker 4>a tough business. It's very competitive. Top blank growth really

0:13:28.720 --> 0:13:31.680
<v Speaker 4>not there for in a large so maybe cutting costs

0:13:31.720 --> 0:13:34.360
<v Speaker 4>is a way to deliver cash it earnings.

0:13:34.000 --> 0:13:36.360
<v Speaker 6>It's part of it. I think they also need to

0:13:36.360 --> 0:13:40.439
<v Speaker 6>move into adjacency. So if you look in Canada at

0:13:40.440 --> 0:13:43.880
<v Speaker 6>the carriers there, like Rogers owns the Toronto Blue Jays

0:13:44.000 --> 0:13:48.079
<v Speaker 6>and Rogers Center Stadium. They're in media, you know, they're

0:13:48.080 --> 0:13:52.360
<v Speaker 6>they're tapping a lot of different adjacencies to make up

0:13:52.400 --> 0:13:54.040
<v Speaker 6>for that slow growth and wireless.

0:13:54.080 --> 0:13:54.320
<v Speaker 3>All right.

0:13:54.360 --> 0:13:56.600
<v Speaker 4>Another story that is really front and center for me

0:13:56.600 --> 0:13:58.600
<v Speaker 4>in it for a lot of the kind of telecom

0:13:58.679 --> 0:14:06.679
<v Speaker 4>equity investors and bond investors is SATs Echo Star.

0:14:06.920 --> 0:14:07.319
<v Speaker 6>Yeah.

0:14:07.360 --> 0:14:11.120
<v Speaker 4>And finally, Charlie Ergen is the CEO and founder of

0:14:11.160 --> 0:14:14.040
<v Speaker 4>Ecostar finally selling the spectrum. Is that what's going on?

0:14:14.080 --> 0:14:15.520
<v Speaker 4>Because he bought a lot of spectrum.

0:14:15.600 --> 0:14:20.000
<v Speaker 6>It has been a crazy ride. So EchoStar, as you know,

0:14:20.080 --> 0:14:25.200
<v Speaker 6>their roots were in satellite delivered PayTV. That market is

0:14:25.320 --> 0:14:28.960
<v Speaker 6>dying with a capital d and his decision was, let

0:14:29.000 --> 0:14:31.400
<v Speaker 6>me take the capital I have and get into the

0:14:31.440 --> 0:14:35.160
<v Speaker 6>consumer wireless business and compete with AT and T Verizon

0:14:35.240 --> 0:14:39.640
<v Speaker 6>and T Mobile. And I think every analyst, including myself, asked,

0:14:39.760 --> 0:14:40.600
<v Speaker 6>what are you doing?

0:14:40.880 --> 0:14:41.120
<v Speaker 3>You know?

0:14:41.280 --> 0:14:45.560
<v Speaker 6>And he bought a treasure trove of spectrum and he

0:14:45.760 --> 0:14:48.840
<v Speaker 6>was sitting on it. He was beginning to deploy it.

0:14:49.120 --> 0:14:51.880
<v Speaker 6>He was building his own wireless network, but they weren't

0:14:51.880 --> 0:14:55.160
<v Speaker 6>getting any subscribers. And I think the FCC looked at

0:14:55.240 --> 0:14:58.800
<v Speaker 6>it and said, we need more spectrum in the hands

0:14:58.800 --> 0:15:01.520
<v Speaker 6>of people that can really fill the air waves. And

0:15:01.600 --> 0:15:05.240
<v Speaker 6>so they started to get pressured a lot by the FCC,

0:15:05.520 --> 0:15:09.600
<v Speaker 6>and that prompted the sales spectrum to STARLINKH and AT

0:15:09.720 --> 0:15:09.920
<v Speaker 6>and T.

0:15:10.400 --> 0:15:12.880
<v Speaker 4>I guess the good news is he is selling the

0:15:12.880 --> 0:15:16.520
<v Speaker 4>spectrum for a lot of money. The stocks up, It's

0:15:16.640 --> 0:15:19.600
<v Speaker 4>tripled this year. That's the good news. The bad news

0:15:19.960 --> 0:15:23.920
<v Speaker 4>it took him about fifteen years steam to do what

0:15:23.960 --> 0:15:26.560
<v Speaker 4>we all knew almost fifteen years ago, which is either

0:15:26.640 --> 0:15:29.200
<v Speaker 4>build a network or you flip the spectrum and we

0:15:29.240 --> 0:15:31.040
<v Speaker 4>make money. I eat either way, but right, woll it

0:15:31.040 --> 0:15:32.000
<v Speaker 4>took a long time for him.

0:15:32.040 --> 0:15:34.440
<v Speaker 6>Well, not only that, I always thought with they were

0:15:34.560 --> 0:15:38.520
<v Speaker 6>Dish as a PATV provider, it's a strong brand name.

0:15:38.640 --> 0:15:43.400
<v Speaker 6>I need become what's called a mobile virtual network operator MVNO,

0:15:43.440 --> 0:15:46.640
<v Speaker 6>where you basically have AT and T and Verizon run

0:15:46.680 --> 0:15:50.040
<v Speaker 6>the network for you. You do the billing, customer care,

0:15:50.200 --> 0:15:53.200
<v Speaker 6>most importantly the marketing, and so you're out there with

0:15:53.320 --> 0:15:56.920
<v Speaker 6>a Dish wireless brand. You don't have to worry about

0:15:57.040 --> 0:16:02.240
<v Speaker 6>spectrum or network operations. And they just decided to do

0:16:02.360 --> 0:16:03.640
<v Speaker 6>the network themselves.

0:16:04.920 --> 0:16:09.600
<v Speaker 1>This is The Bloomberg Intelligence Podcast, available on Apple, Spotify,

0:16:09.800 --> 0:16:13.760
<v Speaker 1>and anywhere else you get your podcasts. Listen live each weekday,

0:16:13.960 --> 0:16:17.240
<v Speaker 1>ten am to noon Eastern on Bloomberg dot com, the

0:16:17.320 --> 0:16:21.200
<v Speaker 1>iHeartRadio app tune In, and the Bloomberg Business app. You

0:16:21.240 --> 0:16:24.520
<v Speaker 1>can also watch us live every weekday on YouTube and

0:16:24.720 --> 0:16:27.520
<v Speaker 1>always on the Bloomberg terminal