1 00:00:01,360 --> 00:00:04,120 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 2 00:00:04,120 --> 00:00:06,200 Speaker 1: with my co host of Bonnie Quinn. Every business day, 3 00:00:06,240 --> 00:00:09,239 Speaker 1: we bring you interviews from CEOs, A, market pros, and 4 00:00:09,400 --> 00:00:12,799 Speaker 1: Bloomberg experts, along with essential market moving news. Find the 5 00:00:12,800 --> 00:00:16,280 Speaker 1: Bloomberg Markets Podcast on Apple podcast or wherever you listen 6 00:00:16,320 --> 00:00:22,720 Speaker 1: to podcasts, and on Bloomberg dot com. Alright, so, the 7 00:00:22,840 --> 00:00:28,800 Speaker 1: Microsoft TikTok President Trump triumvirate is a really interesting little grouping. 8 00:00:29,000 --> 00:00:32,560 Speaker 1: And obviously this story started at the end of last 9 00:00:32,600 --> 00:00:34,800 Speaker 1: week and then there was all sorts of reports coming 10 00:00:34,800 --> 00:00:38,199 Speaker 1: out over the weekend. Today, the latest is that it 11 00:00:38,200 --> 00:00:41,519 Speaker 1: looks like Microsoft is now trying to buy TikTok with 12 00:00:41,600 --> 00:00:45,400 Speaker 1: Trump's approval and is trying to get back in the game, 13 00:00:45,560 --> 00:00:48,040 Speaker 1: so to speak. So let's bring in a Bloomberg opinion 14 00:00:48,040 --> 00:00:50,839 Speaker 1: columnist who's been writing about this. Take him. Thanks for 15 00:00:50,920 --> 00:00:54,920 Speaker 1: joining us. Take him. What is this all about? It's obviously, 16 00:00:55,280 --> 00:00:59,520 Speaker 1: I mean, very tenuously about national security. What would you 17 00:00:59,520 --> 00:01:03,680 Speaker 1: say the reason behind this whole escapade on the part 18 00:01:03,680 --> 00:01:08,200 Speaker 1: of President Trump is, um, it's tough to say. I mean, 19 00:01:08,200 --> 00:01:10,920 Speaker 1: it all started at the beginning of July last month, 20 00:01:11,040 --> 00:01:13,920 Speaker 1: when Secretary Stayed from Pale said, they're looking at it 21 00:01:14,720 --> 00:01:18,400 Speaker 1: concerning banning all these Chinese apps based on national security ascerns. 22 00:01:18,560 --> 00:01:20,960 Speaker 1: And I'm sure part of this political because everyone has 23 00:01:21,040 --> 00:01:24,640 Speaker 1: opinion on TikTok, and every time they talked about TikTok, 24 00:01:24,800 --> 00:01:29,240 Speaker 1: they dominate the headlines, so that that's the issue national 25 00:01:29,360 --> 00:01:32,280 Speaker 1: and gaty privacy concernance according to the government, UM there 26 00:01:32,360 --> 00:01:35,960 Speaker 1: hasn't been any faster evidence that they proved or presented 27 00:01:36,400 --> 00:01:40,319 Speaker 1: uh to substant substantiate those concerns. But it looks like 28 00:01:41,200 --> 00:01:44,280 Speaker 1: with this latest Trump phone call with the CEO of Microsoft, 29 00:01:44,880 --> 00:01:47,800 Speaker 1: they're gonna have forty five days to come to some 30 00:01:47,880 --> 00:01:50,720 Speaker 1: kind of agreement and this would actually solve a lot 31 00:01:50,720 --> 00:01:53,280 Speaker 1: of the concerns that people have and actually makes sense 32 00:01:53,320 --> 00:01:57,400 Speaker 1: for Microsoft too. So today is this kind of the 33 00:01:57,480 --> 00:02:00,600 Speaker 1: latest step and maybe the most important step, and what 34 00:02:00,760 --> 00:02:05,760 Speaker 1: is appearing to be evolving a cold war, a technology 35 00:02:05,800 --> 00:02:11,320 Speaker 1: cold war between China and the West. I think so 36 00:02:11,440 --> 00:02:15,080 Speaker 1: I mean this for some reason, TikTok, and like I said, 37 00:02:15,080 --> 00:02:17,799 Speaker 1: it is because it's a very popular topic has become 38 00:02:17,840 --> 00:02:21,760 Speaker 1: like defront in this rising political and economic tension war 39 00:02:21,800 --> 00:02:25,400 Speaker 1: between the US and China. Trump has repeatedly said that 40 00:02:25,440 --> 00:02:28,880 Speaker 1: he's considering getting the app to retaliate against China over 41 00:02:29,280 --> 00:02:32,240 Speaker 1: how they handle the virus. So it's becoming that key 42 00:02:32,360 --> 00:02:36,520 Speaker 1: vector in the rising tensions between the two countries. But 43 00:02:36,720 --> 00:02:40,919 Speaker 1: you know, just taking everything that China has innovated, let's say, 44 00:02:41,160 --> 00:02:44,320 Speaker 1: or in taking Chinese companies and having US companies buy 45 00:02:44,400 --> 00:02:49,080 Speaker 1: them for parts, is that really a solution here? I 46 00:02:49,120 --> 00:02:52,080 Speaker 1: think it's a solution in the short term. Um, it 47 00:02:52,120 --> 00:02:54,960 Speaker 1: does make sense for Microsoft to take over the US 48 00:02:55,000 --> 00:02:58,920 Speaker 1: stuff basically ensure there will be no privacy issues, no 49 00:02:59,000 --> 00:03:02,240 Speaker 1: security issues, but also opens the door, like you said, 50 00:03:02,280 --> 00:03:07,080 Speaker 1: to other potential retaliation. And you know what's the stop. 51 00:03:08,400 --> 00:03:10,440 Speaker 1: The main issue with TikTok is because it's owned by 52 00:03:10,520 --> 00:03:13,919 Speaker 1: a Chinese company, right, Does that mean every Chinese company 53 00:03:14,040 --> 00:03:17,440 Speaker 1: that owns something that becomes popular in the US or 54 00:03:17,480 --> 00:03:20,400 Speaker 1: buy something in the US? Is that like in play now? 55 00:03:20,560 --> 00:03:23,520 Speaker 1: So it opens the cannon worms that we're really going 56 00:03:23,560 --> 00:03:25,720 Speaker 1: to see how it turns out in the next few 57 00:03:25,760 --> 00:03:29,160 Speaker 1: months to a year. So to your column is out 58 00:03:29,200 --> 00:03:31,359 Speaker 1: and it's in uh, you know, it's a title, the 59 00:03:31,400 --> 00:03:34,840 Speaker 1: TikTok Microsoft deal might solve everything. How do you feel 60 00:03:35,200 --> 00:03:39,360 Speaker 1: what's what's your thesis behind that. So, like like we said, 61 00:03:39,400 --> 00:03:44,240 Speaker 1: if Microsoft does consummate this transaction, they could protect the 62 00:03:44,360 --> 00:03:49,000 Speaker 1: US consumer privacy. It's a hundred million Americans now TikTok 63 00:03:49,000 --> 00:03:51,200 Speaker 1: came out with that number on Saturday for the first time, 64 00:03:51,240 --> 00:03:53,880 Speaker 1: so that's a huge portion of the American population. So 65 00:03:54,520 --> 00:04:00,680 Speaker 1: data security wise, it protects UM Americans data it And 66 00:04:00,720 --> 00:04:04,480 Speaker 1: then from Microsoft, it really helps their advertising business which 67 00:04:04,480 --> 00:04:07,720 Speaker 1: has kind of been floundering. They have the being searchtensined 68 00:04:08,440 --> 00:04:11,160 Speaker 1: and the big question last week with the antitrust hearing 69 00:04:11,160 --> 00:04:13,880 Speaker 1: everyone saying oh there's big tech is they have all 70 00:04:13,960 --> 00:04:16,560 Speaker 1: this market power and anti trust. What this deal does 71 00:04:16,600 --> 00:04:19,719 Speaker 1: from Microsoft and kind a strangely for the ad market, 72 00:04:19,760 --> 00:04:22,200 Speaker 1: is that adds a big third player the digital ad 73 00:04:22,200 --> 00:04:25,520 Speaker 1: market that's dominated by Google and Facebook. So it counterintruvely 74 00:04:25,640 --> 00:04:28,640 Speaker 1: makes UM the market more competitive in terms of the 75 00:04:28,640 --> 00:04:32,360 Speaker 1: anti trust issues. And then from Microsoft this huge base 76 00:04:32,440 --> 00:04:35,919 Speaker 1: of a hundred million consumers, they could cross promoted across 77 00:04:35,960 --> 00:04:39,159 Speaker 1: their other consumer businesses where they have the Xbox gaming 78 00:04:39,160 --> 00:04:42,480 Speaker 1: constable business, they could use this as a key tenant 79 00:04:42,520 --> 00:04:44,960 Speaker 1: of their cloud service where they're the number two player 80 00:04:44,960 --> 00:04:48,159 Speaker 1: ask for Amazon. And they also have this thing where 81 00:04:48,800 --> 00:04:51,360 Speaker 1: on TikTok right now, a lot of the creators can 82 00:04:51,400 --> 00:04:54,120 Speaker 1: do video sprains very similar to Amazon Twitch. So this 83 00:04:54,200 --> 00:04:57,520 Speaker 1: is like a new market where creators can do streaming 84 00:04:57,600 --> 00:05:00,440 Speaker 1: of whatever they want and they get paid the small gifts. 85 00:05:01,120 --> 00:05:03,880 Speaker 1: It's clearly a great deal from Microsoft, right, I mean 86 00:05:03,920 --> 00:05:06,320 Speaker 1: we have we have snapped now as well also trying 87 00:05:06,360 --> 00:05:08,840 Speaker 1: to develop something quickly that would compete with it. I mean, 88 00:05:08,880 --> 00:05:12,520 Speaker 1: obviously it's a great deal for Microsoft. But how unusual 89 00:05:12,839 --> 00:05:15,520 Speaker 1: is it that a president would get involved to this extent. 90 00:05:15,640 --> 00:05:20,839 Speaker 1: I mean, if we're concerned about national security and you know, 91 00:05:20,880 --> 00:05:24,600 Speaker 1: Americans privacy and so on, are we really just handing 92 00:05:24,600 --> 00:05:28,440 Speaker 1: over those concerns to another private company will be at 93 00:05:28,440 --> 00:05:33,320 Speaker 1: a US one. Isn't this a regulator's job? I agree 94 00:05:33,320 --> 00:05:35,279 Speaker 1: with you, it's a total regulators shop. And this is 95 00:05:35,440 --> 00:05:39,640 Speaker 1: very strange in the way Trump has been unilaterally making 96 00:05:39,680 --> 00:05:42,800 Speaker 1: these decisions, and traditionally it's been much more of a 97 00:05:42,880 --> 00:05:47,359 Speaker 1: multilateral do process oriented process. And this is kind of 98 00:05:47,400 --> 00:05:49,320 Speaker 1: strange where all of a sudden they've been looking at 99 00:05:49,360 --> 00:05:52,760 Speaker 1: TikTok league last year in the sixty story view and 100 00:05:52,760 --> 00:05:56,360 Speaker 1: then right before election, you know, they're really bringing up 101 00:05:56,360 --> 00:05:58,960 Speaker 1: to the forefront. So the timing is strange, and the 102 00:05:59,080 --> 00:06:02,240 Speaker 1: d process death only questionable in terms of what's going on, 103 00:06:02,320 --> 00:06:06,120 Speaker 1: and they still haven't presented clear cut evidence that TikTok, 104 00:06:06,520 --> 00:06:10,120 Speaker 1: which the company thoroughly denies, has data process the issues. 105 00:06:11,440 --> 00:06:12,599 Speaker 1: So you do you think this is kind of a 106 00:06:12,640 --> 00:06:15,359 Speaker 1: done deal with Microsoft or we're gonna get other bidders 107 00:06:15,360 --> 00:06:16,840 Speaker 1: coming in here, because I'm sure a lot of other 108 00:06:16,880 --> 00:06:20,000 Speaker 1: tech companies would love to get the US operations of TikTok. 109 00:06:21,240 --> 00:06:24,640 Speaker 1: I think if it happens, it's going to be Microsoft because, 110 00:06:24,680 --> 00:06:28,520 Speaker 1: like I said, the anti trust issues with I'm sure Amazon, Facebook, 111 00:06:28,560 --> 00:06:31,040 Speaker 1: all these guys who love to buy TikTok, but they 112 00:06:31,080 --> 00:06:33,919 Speaker 1: have for the anti trust issues. So the one that 113 00:06:34,000 --> 00:06:36,160 Speaker 1: makes sense is Microsoft because they have the whole in 114 00:06:36,200 --> 00:06:40,040 Speaker 1: their consumer social media segment, and they have the technical 115 00:06:40,120 --> 00:06:42,960 Speaker 1: know how, the financial resources to get down quickly. And 116 00:06:43,000 --> 00:06:46,960 Speaker 1: the funny thing is TikTok's founder used to work on Microsoft, 117 00:06:47,000 --> 00:06:50,280 Speaker 1: so there's a lot of connections there. That's not The 118 00:06:50,320 --> 00:06:52,000 Speaker 1: deal that I was talking about was the deal with 119 00:06:52,080 --> 00:06:54,560 Speaker 1: music companies to add songs to videos. So just this 120 00:06:54,600 --> 00:06:56,560 Speaker 1: morning we heard that a snap and secured rights from 121 00:06:56,600 --> 00:07:00,839 Speaker 1: Warner Universal Publishing and Merlin which sounds very close to 122 00:07:00,880 --> 00:07:03,760 Speaker 1: what the TikTok experience would be right to ten seconds, 123 00:07:03,800 --> 00:07:05,840 Speaker 1: and you can add sort of songs and so on. 124 00:07:06,640 --> 00:07:09,080 Speaker 1: Is there any guarantee that all of these users that 125 00:07:09,240 --> 00:07:13,240 Speaker 1: loved TikTok when it was a Chinese owned company would 126 00:07:13,320 --> 00:07:16,640 Speaker 1: stay with TikTok wants a Microsoft own company, I mean something, 127 00:07:16,760 --> 00:07:19,920 Speaker 1: there's something different about Microsoft own TikTok. TikTok then bye 128 00:07:19,960 --> 00:07:24,840 Speaker 1: Dance TikTok. I think they're definitely gonna stay. My I'm 129 00:07:24,880 --> 00:07:28,040 Speaker 1: slightly less confident in TikTok stability in a date like 130 00:07:28,160 --> 00:07:30,720 Speaker 1: two or three years out as Microsoft buys them, because 131 00:07:30,760 --> 00:07:33,600 Speaker 1: it was a different engineering team in different sense, but 132 00:07:33,880 --> 00:07:36,480 Speaker 1: at least in the mix short and intermediate term, there's 133 00:07:36,480 --> 00:07:39,800 Speaker 1: no doubt TikTok us static. Microsoft buys them because it 134 00:07:39,840 --> 00:07:43,520 Speaker 1: means they're app survived. Um, they're basically like crying and 135 00:07:43,560 --> 00:07:46,800 Speaker 1: depressed over over the weekend thinking that it's going to 136 00:07:46,800 --> 00:07:48,440 Speaker 1: get banned because Trump said he was going to ban 137 00:07:48,680 --> 00:07:52,560 Speaker 1: on Saturday and that hasn't happened. So yeah, Microsoft buying 138 00:07:52,560 --> 00:07:57,000 Speaker 1: it would be the apps users will be very happy. Interesting, 139 00:07:57,000 --> 00:08:00,400 Speaker 1: well fascinating story to follow in the coming week and 140 00:08:00,480 --> 00:08:03,520 Speaker 1: months as you suggested take take him technology calumnists for 141 00:08:03,560 --> 00:08:05,600 Speaker 1: Bloomberg Opinion. You can read all of Tay's work and 142 00:08:05,640 --> 00:08:08,920 Speaker 1: that of our fine Bloomberg opinion columnists at Bloomberg dot com, 143 00:08:09,040 --> 00:08:12,800 Speaker 1: slash Opinion or O. P. I. N. Go on the terminal. 144 00:08:12,840 --> 00:08:15,280 Speaker 1: Lots of great work there, and again the very interesting deal, 145 00:08:15,640 --> 00:08:17,960 Speaker 1: a lot of folks saying this really, you know, sets 146 00:08:18,000 --> 00:08:22,040 Speaker 1: down the marker for a cold war and technology be 147 00:08:22,200 --> 00:08:25,360 Speaker 1: team between China and the West um and that could 148 00:08:25,360 --> 00:08:28,080 Speaker 1: have ramifications for years to come. And Bloomberg will certainly 149 00:08:28,120 --> 00:08:34,880 Speaker 1: follow that story. This is Bloomberg Markets with Paul Sweeney 150 00:08:34,920 --> 00:08:38,480 Speaker 1: and Bunny Quinn on Bloomberg Radio. Well, we got some 151 00:08:38,720 --> 00:08:42,440 Speaker 1: better than expected manufacturing dated this morning, so that's a 152 00:08:42,480 --> 00:08:46,320 Speaker 1: great time to chat about the auto business. Alan Baum, 153 00:08:46,440 --> 00:08:50,040 Speaker 1: auto analysts and principal Bauman Associates, joins us this morning. Alan, 154 00:08:50,080 --> 00:08:52,440 Speaker 1: thanks so much for joining us here. Let's step back 155 00:08:53,120 --> 00:08:55,560 Speaker 1: just give us Allen maybe the thirty thousand foot view 156 00:08:55,559 --> 00:08:57,680 Speaker 1: of the US auto industry. And I want to start 157 00:08:57,720 --> 00:09:00,760 Speaker 1: with production. What are the factories doing terms of production? 158 00:09:00,880 --> 00:09:04,880 Speaker 1: How open are they? Well? Production has actually done much 159 00:09:04,960 --> 00:09:10,240 Speaker 1: better uh than expected and frankly better than the market needs. 160 00:09:10,280 --> 00:09:13,040 Speaker 1: It to do. Now, that's obviously not true in the 161 00:09:13,160 --> 00:09:16,880 Speaker 1: area of the vehicles that are doing the best, trucks 162 00:09:16,920 --> 00:09:22,160 Speaker 1: and SUVs, But in general, UH production is getting the 163 00:09:22,200 --> 00:09:27,000 Speaker 1: inventories back to a reasonable level, again with some exceptions 164 00:09:27,000 --> 00:09:29,640 Speaker 1: in pickups where you you generally like to have a 165 00:09:29,640 --> 00:09:32,560 Speaker 1: lot of inventory because there's a lot of diversity within 166 00:09:32,600 --> 00:09:36,800 Speaker 1: the product line. UM. That's said, that means that we're 167 00:09:36,840 --> 00:09:40,240 Speaker 1: in a position where as we expect sales to be 168 00:09:40,360 --> 00:09:43,600 Speaker 1: quite shoppy now through the next couple of months because 169 00:09:43,600 --> 00:09:47,720 Speaker 1: of the virus, UH production will will start to pull 170 00:09:47,760 --> 00:09:52,040 Speaker 1: back a little bit unless the automakers go ahead and 171 00:09:52,240 --> 00:09:55,120 Speaker 1: make those vehicles and then get themselves in a in 172 00:09:55,160 --> 00:09:58,760 Speaker 1: a bit of a pickle because of H too much 173 00:09:58,800 --> 00:10:01,679 Speaker 1: inventory and then apps to need to go to incentives. 174 00:10:02,559 --> 00:10:08,600 Speaker 1: Who will surprise us today, Well, unfortunately, not that many 175 00:10:08,640 --> 00:10:13,160 Speaker 1: automakers report UH. This is something that was started by 176 00:10:13,200 --> 00:10:15,560 Speaker 1: General Motors a couple of years ago, and most of 177 00:10:15,559 --> 00:10:19,760 Speaker 1: the industry has has followed. All we're gonna see today 178 00:10:19,800 --> 00:10:24,680 Speaker 1: is Hyundai, Toyota, Honda, Mazdao, UM and I might have 179 00:10:24,880 --> 00:10:30,000 Speaker 1: might have missed UH company or or so UM what 180 00:10:30,160 --> 00:10:34,520 Speaker 1: we've already seen Hyundai and and Toyota and Mazda report UM, 181 00:10:34,840 --> 00:10:40,720 Speaker 1: and Toyota uh was down. Uh. There the the group 182 00:10:40,760 --> 00:10:44,640 Speaker 1: they're they're certainly the full line automakers, very much exposed 183 00:10:44,679 --> 00:10:47,440 Speaker 1: to both the car and the truck market, whereas Hyundai 184 00:10:47,600 --> 00:10:52,280 Speaker 1: is increasingly moving over to the crossover side. They had 185 00:10:52,320 --> 00:10:55,920 Speaker 1: a one percent gain UM, which is in large part 186 00:10:56,040 --> 00:10:58,840 Speaker 1: the same story as the last few months. New product 187 00:10:58,920 --> 00:11:04,000 Speaker 1: has helped them a lot, particularly on the crossover side. So, Allen, 188 00:11:04,160 --> 00:11:06,080 Speaker 1: where are we on the demand side? I have some 189 00:11:06,120 --> 00:11:09,200 Speaker 1: anecdotal evidence from a buddy mine who manages a dealership 190 00:11:09,240 --> 00:11:10,920 Speaker 1: here in New Jersey, and he was kind of surprised 191 00:11:10,960 --> 00:11:14,480 Speaker 1: that how strong the sales have been as they reopened 192 00:11:14,600 --> 00:11:19,240 Speaker 1: their dealership. Um, how are you viewing the demand side? Well, 193 00:11:19,280 --> 00:11:22,839 Speaker 1: we've got short term pent up demand from the March 194 00:11:22,920 --> 00:11:27,679 Speaker 1: April May period. Uh that has has really propelled the market. 195 00:11:27,960 --> 00:11:31,319 Speaker 1: You know, a lot of lease leases were extended, UM 196 00:11:31,600 --> 00:11:35,400 Speaker 1: and Uh it became a good deal, particularly in the 197 00:11:35,480 --> 00:11:38,960 Speaker 1: earlier part of the of this May June July period 198 00:11:39,320 --> 00:11:41,880 Speaker 1: to come in and and get a get a product, 199 00:11:42,440 --> 00:11:45,560 Speaker 1: as I say, particularly with high incentives. Those incentives have 200 00:11:45,600 --> 00:11:49,760 Speaker 1: actually backed off dramatically because they're they're simply in the 201 00:11:50,080 --> 00:11:55,000 Speaker 1: high uh demand uh segments. Uh, there's not as much 202 00:11:55,040 --> 00:11:58,480 Speaker 1: product uh and so no reason for the automakers or 203 00:11:58,520 --> 00:12:02,000 Speaker 1: the dealers to offer those high incentives. In fact, the 204 00:12:02,040 --> 00:12:05,280 Speaker 1: automakers and the and the dealers are making more per 205 00:12:05,400 --> 00:12:09,040 Speaker 1: vehicle right now than they do normally, again, because those 206 00:12:09,080 --> 00:12:12,920 Speaker 1: incentives are down, and because fleet sales have almost dropped 207 00:12:12,920 --> 00:12:16,000 Speaker 1: to to to nothing uh and of course those were 208 00:12:16,080 --> 00:12:23,280 Speaker 1: less generally less profitable UH sales. That said, I'm expecting 209 00:12:23,280 --> 00:12:29,360 Speaker 1: a rather uh poor uh fall period. Um. Again, going back, 210 00:12:29,840 --> 00:12:33,520 Speaker 1: of course to the virus, what we're also seeing is 211 00:12:33,559 --> 00:12:36,000 Speaker 1: that UM, you know, there there's a lot of talk, 212 00:12:36,200 --> 00:12:39,520 Speaker 1: even uh from me a few months ago that might 213 00:12:39,559 --> 00:12:41,680 Speaker 1: have said, well, this is not going to be quite 214 00:12:41,760 --> 00:12:45,240 Speaker 1: as bad as it might otherwise be because new cars 215 00:12:45,240 --> 00:12:49,600 Speaker 1: are bought by upper income people. In fact, we are 216 00:12:49,640 --> 00:12:54,720 Speaker 1: seeing the luxury carmakers, particularly the Mercedes and and the 217 00:12:55,000 --> 00:12:59,080 Speaker 1: BMW's of the world, not doing well at all uh 218 00:12:59,120 --> 00:13:02,120 Speaker 1: and and I think that's attributed to the fact, not 219 00:13:02,200 --> 00:13:06,360 Speaker 1: necessarily the buyers don't at the income but because they're 220 00:13:06,400 --> 00:13:11,199 Speaker 1: they're they're so concerned about what the process of recovery 221 00:13:11,320 --> 00:13:15,400 Speaker 1: is going to be, either for their own businesses or 222 00:13:15,559 --> 00:13:18,880 Speaker 1: for the the economy as a whole. And how uh 223 00:13:19,200 --> 00:13:22,760 Speaker 1: they clearly don't have to buy. And with the decline 224 00:13:22,760 --> 00:13:26,800 Speaker 1: and uh in availability in some cases and incentages in 225 00:13:26,840 --> 00:13:30,520 Speaker 1: the other, uh, they're not. So if that's the case 226 00:13:30,559 --> 00:13:34,400 Speaker 1: with wealthy buyers, what's the case with less wealthy buyers 227 00:13:34,440 --> 00:13:37,160 Speaker 1: that might be hoping for a new stimulus check or 228 00:13:37,320 --> 00:13:40,200 Speaker 1: waiting on you know, the extension of federal benefits to 229 00:13:40,240 --> 00:13:43,600 Speaker 1: add too unemployment benefits statewise in order just to live, 230 00:13:43,640 --> 00:13:48,319 Speaker 1: never mind drive well. Yeah, and and those less wealthy buyers, 231 00:13:48,360 --> 00:13:51,680 Speaker 1: as you say, very correctly, uh, the the almost the 232 00:13:51,760 --> 00:13:53,720 Speaker 1: last thing that they're going to think about is a 233 00:13:53,720 --> 00:13:58,040 Speaker 1: new car, and even a late model used car. I mean, 234 00:13:58,160 --> 00:14:01,120 Speaker 1: this is this is the time. Uh. And and those 235 00:14:01,160 --> 00:14:05,199 Speaker 1: those volumes are a little depressed, as some people hold 236 00:14:05,240 --> 00:14:11,400 Speaker 1: onto their lease cars beyond uh the expiration of their lease. Uh. 237 00:14:11,440 --> 00:14:14,560 Speaker 1: And so clearly, as you say, you're gonna be paying 238 00:14:14,559 --> 00:14:18,040 Speaker 1: the rent and uh and giving yourself uh fed and 239 00:14:18,040 --> 00:14:23,040 Speaker 1: and uh in your home as opposed to buying even 240 00:14:23,200 --> 00:14:26,320 Speaker 1: a used car. And and uh, as as I said 241 00:14:26,360 --> 00:14:30,320 Speaker 1: a minute ago, uh, increasingly that new car buyer is 242 00:14:30,360 --> 00:14:34,160 Speaker 1: the upper income buyers. So those uh now that's not 243 00:14:34,240 --> 00:14:37,760 Speaker 1: to say, of course that uh the unemployment search has 244 00:14:37,800 --> 00:14:41,360 Speaker 1: not affected across the board, but it certainly has a 245 00:14:41,400 --> 00:14:46,560 Speaker 1: greater impact on that lower income person. So, Allen, let's 246 00:14:46,800 --> 00:14:49,640 Speaker 1: just real quickly here. What's the impact of any so 247 00:14:49,680 --> 00:14:54,560 Speaker 1: far on the electric vehicle market stemming from the pandemic? Well, 248 00:14:54,760 --> 00:14:59,600 Speaker 1: you know, the problem is UH that uh a number 249 00:15:00,000 --> 00:15:03,800 Speaker 1: of new vehicles have been delayed a little bit new 250 00:15:03,880 --> 00:15:09,200 Speaker 1: launches um, and the volumes were pretty modest, uh even 251 00:15:09,480 --> 00:15:13,560 Speaker 1: with the launches, with the obvious exception of Tesla. UH 252 00:15:13,600 --> 00:15:16,560 Speaker 1: and and Tesla, just as its stock seems to be 253 00:15:16,640 --> 00:15:19,200 Speaker 1: on another plane, uh, some of its sales are on 254 00:15:19,240 --> 00:15:23,080 Speaker 1: another plane as well. UM because uh and and I 255 00:15:23,400 --> 00:15:25,800 Speaker 1: will be one of the first pisode that the uh 256 00:15:26,080 --> 00:15:30,280 Speaker 1: the competition the Tesla faces is a lot less obvious 257 00:15:30,280 --> 00:15:32,280 Speaker 1: than it than it might seem. And what I mean 258 00:15:32,360 --> 00:15:38,040 Speaker 1: by that is as other automakers UH introduce electric vehicles, 259 00:15:38,080 --> 00:15:42,440 Speaker 1: some of them frankly with a lot less uh interest 260 00:15:42,680 --> 00:15:46,640 Speaker 1: or excitement if you will, UH than a player like Tesla, 261 00:15:47,200 --> 00:15:50,600 Speaker 1: UM with their own marketing efforts, UH leading the way 262 00:15:50,680 --> 00:15:53,960 Speaker 1: in that lack of excitement if you will, UM that 263 00:15:54,360 --> 00:15:58,440 Speaker 1: those those sales are not gonna be great. Uh and uh. 264 00:15:58,480 --> 00:16:02,840 Speaker 1: We've also seen UM in part because of regulatory issues 265 00:16:02,880 --> 00:16:05,680 Speaker 1: here in the US, where they at least temporarily have 266 00:16:05,840 --> 00:16:10,040 Speaker 1: backed away, and in Europe where those requirements are quite strong. 267 00:16:10,560 --> 00:16:14,360 Speaker 1: Uh and uh, the automakers have focused on the markets 268 00:16:14,360 --> 00:16:17,880 Speaker 1: where they need to meet regulations. Alan, thank you, always 269 00:16:17,920 --> 00:16:20,160 Speaker 1: a pleasure to speak with you. That's allan Bomb, a 270 00:16:20,240 --> 00:16:22,680 Speaker 1: Bomb and associates. And don't forget a little later on 271 00:16:22,760 --> 00:16:32,520 Speaker 1: we get July auto sales numbers. This is Bloomberg. Robert 272 00:16:32,520 --> 00:16:36,480 Speaker 1: Thompson is CEO of Clinical Reference Laboratory. It's one of 273 00:16:36,520 --> 00:16:39,520 Speaker 1: the largest privately held clinical testing labs in the US. 274 00:16:39,680 --> 00:16:43,320 Speaker 1: Well now it's developing a rapid response COVID test, basically 275 00:16:43,360 --> 00:16:47,200 Speaker 1: one with the forty eight hour turnaround period. Let's check 276 00:16:47,240 --> 00:16:49,720 Speaker 1: in with Mr Thompson now to see how the development 277 00:16:49,720 --> 00:16:52,600 Speaker 1: of this test is going, not only development of the test, 278 00:16:52,680 --> 00:16:56,880 Speaker 1: but also FDA emergency approval. Robert, thank you for joining us. 279 00:16:56,920 --> 00:17:00,400 Speaker 1: First of all, how does your rapid response test differ 280 00:17:00,480 --> 00:17:05,280 Speaker 1: from others that are almost on the market. So our 281 00:17:05,320 --> 00:17:08,880 Speaker 1: test is a saliva based test. Um It's called CRL 282 00:17:09,000 --> 00:17:14,160 Speaker 1: rapid response and saliva allows for easy, frequent testing. It's 283 00:17:14,240 --> 00:17:17,840 Speaker 1: much more pleasant than the traditional nasal swabs, and it 284 00:17:17,840 --> 00:17:24,320 Speaker 1: allows for the testing of large populations quickly and cost effectively. Alright, So, Robert, 285 00:17:24,320 --> 00:17:27,480 Speaker 1: one of the key things is turnaround times. Um, you know, 286 00:17:27,480 --> 00:17:30,040 Speaker 1: we talk about we're doing millions and millions of tests, 287 00:17:30,080 --> 00:17:33,840 Speaker 1: but they're really, for many people ineffectual because the turnaround 288 00:17:33,840 --> 00:17:35,879 Speaker 1: times can take you know, seven, eight, nine days and 289 00:17:35,880 --> 00:17:38,320 Speaker 1: therefore kind of defeats the whole purpose. Give us a 290 00:17:38,359 --> 00:17:41,040 Speaker 1: sense of how sure, how much confident do you have 291 00:17:41,040 --> 00:17:46,800 Speaker 1: in your hour turnaround time? Well, I have a great 292 00:17:46,960 --> 00:17:50,920 Speaker 1: degree of confidence in it. We have invested heavily in automation, 293 00:17:51,000 --> 00:17:54,720 Speaker 1: which has allowed us to really radically expand the number 294 00:17:54,760 --> 00:17:57,680 Speaker 1: of tests that we can do in any given day. Um, 295 00:17:57,840 --> 00:18:02,280 Speaker 1: we're planning on fifty US per day and actually have 296 00:18:02,320 --> 00:18:06,399 Speaker 1: the ability to scale beyond that if need be. So, 297 00:18:06,640 --> 00:18:10,240 Speaker 1: how does the FDA emergency approval work? Are there stag disolves? 298 00:18:10,520 --> 00:18:14,840 Speaker 1: How do you sort of distinguish yourself from you know, 299 00:18:15,119 --> 00:18:17,600 Speaker 1: I'm sure tens, if not hundreds of other companies trying 300 00:18:17,640 --> 00:18:22,840 Speaker 1: to do various things in terms of testing. So the 301 00:18:22,960 --> 00:18:26,680 Speaker 1: FDA processes is a rigorous multi month process where they 302 00:18:26,720 --> 00:18:29,480 Speaker 1: make you, uh, you go through a set of clinical 303 00:18:29,520 --> 00:18:33,320 Speaker 1: trials where you're comparing your product to other approved products 304 00:18:33,320 --> 00:18:36,359 Speaker 1: on the market. We compared ourselves to those sort of 305 00:18:36,480 --> 00:18:40,800 Speaker 1: six inch deep UH deep sinus and pea swabs um 306 00:18:40,840 --> 00:18:43,400 Speaker 1: and we showed a hundred percent agreement with those, so 307 00:18:43,680 --> 00:18:48,040 Speaker 1: we're uh as accurate as the n P swab is. 308 00:18:48,720 --> 00:18:53,159 Speaker 1: The goal here is really to provide a service to 309 00:18:53,200 --> 00:18:56,840 Speaker 1: get America back to work and school. So we paired 310 00:18:56,960 --> 00:19:00,560 Speaker 1: the the test itself with a with a web application 311 00:19:01,080 --> 00:19:04,760 Speaker 1: which uh sort of pre registers a test whether you're 312 00:19:04,800 --> 00:19:07,280 Speaker 1: doing it at home, or you're doing it in a 313 00:19:07,359 --> 00:19:11,760 Speaker 1: school cafeteria, or you're doing um, doing it in a workplace, 314 00:19:12,280 --> 00:19:16,359 Speaker 1: and we deliver the result back to the you know, 315 00:19:16,400 --> 00:19:19,960 Speaker 1: the employee or the student back over that that same 316 00:19:20,000 --> 00:19:23,920 Speaker 1: app So we've wrapped an entire solution around the very accurate, 317 00:19:24,000 --> 00:19:28,000 Speaker 1: quick and easy test UM. All right, so you received 318 00:19:28,119 --> 00:19:31,240 Speaker 1: the clinical research laboratory received the approval. What are next steps? 319 00:19:33,400 --> 00:19:36,080 Speaker 1: We've been able to operate as a lab developed test 320 00:19:36,160 --> 00:19:40,520 Speaker 1: for some time, so we have we have aggressively built 321 00:19:40,560 --> 00:19:43,200 Speaker 1: out our capacity. So at this point, there were a 322 00:19:43,240 --> 00:19:46,160 Speaker 1: bunch of our clients that were waiting for the eu 323 00:19:46,240 --> 00:19:50,560 Speaker 1: A before they started testing. So we've really the phones 324 00:19:50,600 --> 00:19:53,879 Speaker 1: have been ringing off the hook. Here we have banks, airlines, 325 00:19:53,960 --> 00:20:00,480 Speaker 1: sports teams, auto manufacturers, retailers, financial organizations, and universe cities 326 00:20:01,000 --> 00:20:06,840 Speaker 1: all under contractor in the process of contracting with us UM. 327 00:20:06,920 --> 00:20:10,480 Speaker 1: As an example, University of Kansas, we will be handling 328 00:20:10,480 --> 00:20:15,240 Speaker 1: over twenty five students as they returned to to school 329 00:20:15,280 --> 00:20:17,320 Speaker 1: over the next three weeks. We'll be testing all of 330 00:20:17,359 --> 00:20:20,879 Speaker 1: them upon entry. So, Robert, I mean, this sounds amazing. 331 00:20:21,320 --> 00:20:23,240 Speaker 1: And you know, if everyone in the country were to 332 00:20:23,240 --> 00:20:25,960 Speaker 1: get one, you know, on a twice weekly basis, we'd 333 00:20:25,960 --> 00:20:29,480 Speaker 1: probably really tump down this thing. What are the barriers 334 00:20:29,480 --> 00:20:35,200 Speaker 1: to something like that happening? Really, the restriction on capacity 335 00:20:35,240 --> 00:20:38,200 Speaker 1: is more about the availability of the testing equipment than 336 00:20:38,240 --> 00:20:42,119 Speaker 1: anything else. Most of these tests at our lab and 337 00:20:42,160 --> 00:20:45,120 Speaker 1: a QUEST and lab corps as well, we rely on 338 00:20:45,200 --> 00:20:49,440 Speaker 1: automation in the form of liquid handling robots, and those 339 00:20:49,440 --> 00:20:53,040 Speaker 1: have been very hard to come by. Uh. Gradually, the 340 00:20:53,160 --> 00:20:56,239 Speaker 1: supply chains are expanding and we're beginning to see not 341 00:20:56,320 --> 00:20:58,639 Speaker 1: only in our lab but in other labs UM the 342 00:20:58,680 --> 00:21:01,960 Speaker 1: ability to ramp up for auctions significantly. The f t 343 00:21:02,080 --> 00:21:05,080 Speaker 1: A also recently approved pooling, which I know QUEST and 344 00:21:05,160 --> 00:21:08,240 Speaker 1: lab corps are going to be using which will expand 345 00:21:08,359 --> 00:21:12,800 Speaker 1: their capacity to test, especially in low prevalence areas, by 346 00:21:12,800 --> 00:21:16,760 Speaker 1: four to five times. So, Robert, is a scenario for you. 347 00:21:16,760 --> 00:21:20,240 Speaker 1: You mentioned a test as a capacity that you could 348 00:21:20,560 --> 00:21:22,240 Speaker 1: increase from. There is it does it make sense to 349 00:21:22,240 --> 00:21:25,000 Speaker 1: you to license your technology out to maybe some of 350 00:21:25,000 --> 00:21:31,440 Speaker 1: these bigger testing companies UM. We are having conversations with 351 00:21:31,640 --> 00:21:37,280 Speaker 1: some additional laboratories UM, in particular in the university space. 352 00:21:37,680 --> 00:21:40,080 Speaker 1: There have been some labs that have that have expressed 353 00:21:40,080 --> 00:21:43,879 Speaker 1: an interest. There are other labs working on saliva based testing. 354 00:21:43,920 --> 00:21:46,600 Speaker 1: You'll be hearing more about it in the coming weeks, 355 00:21:46,640 --> 00:21:49,399 Speaker 1: just because of the ease of use and the and 356 00:21:49,520 --> 00:21:53,000 Speaker 1: the accuracy of the test. We partnered with a couple 357 00:21:53,000 --> 00:21:57,840 Speaker 1: of companies or Shure Technologies for the collection device which 358 00:21:57,920 --> 00:22:00,439 Speaker 1: preserves the sample for shipping to the labrary tory for 359 00:22:00,520 --> 00:22:03,840 Speaker 1: up to twenty one days, and with Codiagnostics, who's our 360 00:22:03,920 --> 00:22:07,400 Speaker 1: partner for probes and primers, which is you know, sort 361 00:22:07,400 --> 00:22:09,960 Speaker 1: of think of it as the chemicals that that detect 362 00:22:10,440 --> 00:22:14,960 Speaker 1: the viral nucleic acid UM and both of them together 363 00:22:15,480 --> 00:22:19,040 Speaker 1: it creates a very unique and sensitive tests were more 364 00:22:19,080 --> 00:22:22,760 Speaker 1: sensitive statistically than the other products on the market, Robert, 365 00:22:22,760 --> 00:22:24,399 Speaker 1: how much does it cost and how long does it 366 00:22:24,440 --> 00:22:26,800 Speaker 1: stay valid for? So if I'm tested today and I 367 00:22:26,840 --> 00:22:29,520 Speaker 1: meet somebody later that hazard, you know, will I need 368 00:22:29,720 --> 00:22:33,800 Speaker 1: another test tomorrow? It is always. All of these viral 369 00:22:33,840 --> 00:22:38,680 Speaker 1: tests are a spot in time. So the most companies 370 00:22:38,720 --> 00:22:42,240 Speaker 1: are creating and universities are creating sort of a regular 371 00:22:42,760 --> 00:22:46,920 Speaker 1: frequency of testing, a cadence of testing to try to 372 00:22:47,040 --> 00:22:49,240 Speaker 1: keep you know, as you were calling it tamped down 373 00:22:49,280 --> 00:22:52,560 Speaker 1: on the on the number of outbreaks. The other aspect 374 00:22:52,560 --> 00:22:54,959 Speaker 1: of this is that we have to respond quickly when 375 00:22:55,040 --> 00:22:58,000 Speaker 1: there is an outbreak. We can't wait fourteen days or 376 00:22:58,119 --> 00:23:00,600 Speaker 1: even seven days for results, as you were saying earlier, 377 00:23:00,960 --> 00:23:03,120 Speaker 1: they have to get results back in twenty four forty 378 00:23:03,160 --> 00:23:05,800 Speaker 1: eight hours. Okay, Robert, really really exciting news. The best 379 00:23:05,800 --> 00:23:07,600 Speaker 1: of luck to you in the company. Robert Thompson, CEO 380 00:23:07,600 --> 00:23:11,840 Speaker 1: of Clinical Reference Lab talking about a rapid COVID nineteen 381 00:23:11,840 --> 00:23:19,720 Speaker 1: tests using saliva, key thing, twenty four hour turnaround. Very 382 00:23:19,760 --> 00:23:22,280 Speaker 1: excited to speak with our next guest. He is known 383 00:23:22,480 --> 00:23:27,560 Speaker 1: the country over after the very popular documentary on cheer 384 00:23:27,640 --> 00:23:30,560 Speaker 1: leading called Cheer but also because many people need to 385 00:23:30,600 --> 00:23:35,000 Speaker 1: buy his stuff Adam Bloominfeld is CEO at Varsity Brands 386 00:23:35,000 --> 00:23:38,720 Speaker 1: and he joins us now from Pharmas, Texas. Adam, thanks 387 00:23:38,760 --> 00:23:41,200 Speaker 1: for joining. Talked to us about how the pandemic has 388 00:23:41,320 --> 00:23:46,160 Speaker 1: impacted sales and also subscriptions, for example to your internal 389 00:23:46,200 --> 00:23:50,680 Speaker 1: TV service. Well, thank you Vannie and Paul for having me. Um. 390 00:23:50,720 --> 00:23:52,520 Speaker 1: I will tell you that the pandemic has been no 391 00:23:52,600 --> 00:23:56,240 Speaker 1: friend to anybody that serves schools, as you will probably imagine. 392 00:23:56,720 --> 00:23:59,760 Speaker 1: But that being said, we have pivoted pretty hard to 393 00:24:00,040 --> 00:24:03,520 Speaker 1: a virtual world here at Varsity Brands. For those who 394 00:24:03,560 --> 00:24:06,840 Speaker 1: don't know, we're comprised of b Sen Sports does sporting 395 00:24:06,880 --> 00:24:10,439 Speaker 1: goods apparel across the country, Varsity Spirit as cheered dancing 396 00:24:10,480 --> 00:24:13,000 Speaker 1: band as your reference, and Hearth Jones is our achievement 397 00:24:13,080 --> 00:24:17,120 Speaker 1: arm that does class rings, caps and gowns and diplomas. 398 00:24:17,240 --> 00:24:20,199 Speaker 1: And I will tell you that post pandemic, we have 399 00:24:20,400 --> 00:24:23,600 Speaker 1: really started engaging with our clients a different way, UH, 400 00:24:23,720 --> 00:24:26,880 Speaker 1: most notably to a program called Impact Now, which launches 401 00:24:27,000 --> 00:24:30,480 Speaker 1: this week. Actually, we're helping fifty five million kids across 402 00:24:30,520 --> 00:24:35,320 Speaker 1: the country, UH with masks, signage both inside the school 403 00:24:35,320 --> 00:24:38,320 Speaker 1: and outside the school, and empowerment journals so that kids 404 00:24:38,320 --> 00:24:41,480 Speaker 1: can get used to journaling and dealing with the problems 405 00:24:41,760 --> 00:24:46,399 Speaker 1: attendant to anxiety, depression, isolation during the kinds of events 406 00:24:46,400 --> 00:24:49,480 Speaker 1: that we're seeing right now. So it's curriculum for schools 407 00:24:49,560 --> 00:24:53,080 Speaker 1: to get through back to school, get there safely and securely. 408 00:24:53,400 --> 00:24:56,359 Speaker 1: And it's been the biggest pivot that we've made so far, uh, 409 00:24:56,440 --> 00:24:59,400 Speaker 1: in the sixteen weeks of the pandemic. So, Adam, what's 410 00:24:59,480 --> 00:25:02,199 Speaker 1: your sense from the schools that you deal with. What 411 00:25:02,240 --> 00:25:04,400 Speaker 1: percentage would you say are going to try to reopen 412 00:25:05,320 --> 00:25:09,480 Speaker 1: virtually versus physically or maybe even a hybrid. Yeah, it's 413 00:25:09,480 --> 00:25:12,199 Speaker 1: a total hybrid. In the checkerboard. We have schools in 414 00:25:12,200 --> 00:25:15,479 Speaker 1: Georgia that are opening today, we have schools on the 415 00:25:15,520 --> 00:25:18,199 Speaker 1: West Coast that have deferred or gone virtual for the 416 00:25:18,320 --> 00:25:20,879 Speaker 1: entire fall season, and then we have many schools as 417 00:25:20,880 --> 00:25:23,840 Speaker 1: you mentioned, that are in between. Um. I've seen a 418 00:25:23,920 --> 00:25:26,000 Speaker 1: lot of schools in the last two weeks announced a 419 00:25:26,080 --> 00:25:28,680 Speaker 1: hybrid model where kids will be on campus two to 420 00:25:28,760 --> 00:25:32,760 Speaker 1: three days in high schools per week and then virtual 421 00:25:32,960 --> 00:25:36,160 Speaker 1: the other times. Interestingly, we're seeing a number of districts 422 00:25:36,440 --> 00:25:41,840 Speaker 1: use extracurricular activities its sport, cheer outside of school activities 423 00:25:41,920 --> 00:25:44,199 Speaker 1: as a way to keep the kids engaged outside of 424 00:25:44,200 --> 00:25:47,240 Speaker 1: the classroom, even if they can't stay engaged inside the classrooms. 425 00:25:48,359 --> 00:25:51,119 Speaker 1: So Vaine acquired you back in two thousand eighteen. Right, 426 00:25:51,119 --> 00:25:53,240 Speaker 1: how much has Beyan been involved since the beginning of 427 00:25:53,240 --> 00:25:56,560 Speaker 1: the pandemic? And you know, how much has your actual 428 00:25:56,680 --> 00:26:01,080 Speaker 1: revenue been impacted? So Bank Capital, which bought the business 429 00:26:01,119 --> 00:26:03,720 Speaker 1: about two years ago, Uh, majority of the business, Charles 430 00:26:03,800 --> 00:26:07,600 Speaker 1: Bank Capital Partners still thing has been extremely involved. Um. 431 00:26:07,640 --> 00:26:10,440 Speaker 1: You know, they sit on our board as you would imagine, 432 00:26:10,720 --> 00:26:13,679 Speaker 1: and have been incredible thought partners for the last sixteen 433 00:26:13,680 --> 00:26:16,359 Speaker 1: to twenty weeks but also the last two years. I 434 00:26:16,359 --> 00:26:18,919 Speaker 1: can't tell you. I've been in the public markets before 435 00:26:19,720 --> 00:26:22,640 Speaker 1: our business was public, before going private twenty years ago, 436 00:26:23,080 --> 00:26:27,160 Speaker 1: and the the amount of progress and change you can 437 00:26:27,200 --> 00:26:31,000 Speaker 1: make with private equity, thought leadership and that kind of 438 00:26:31,040 --> 00:26:34,720 Speaker 1: attention to detail is unmatched, in my opinion, compared to 439 00:26:34,720 --> 00:26:37,399 Speaker 1: other ways of running a business. So I'm grateful to 440 00:26:37,480 --> 00:26:41,159 Speaker 1: have them. Having said that, we've seen revenue to your 441 00:26:41,240 --> 00:26:46,199 Speaker 1: question down as much as when the pandemic started, and 442 00:26:46,240 --> 00:26:48,639 Speaker 1: it's improved gradually. So I would tell you that revenue 443 00:26:48,680 --> 00:26:52,639 Speaker 1: is down in the range now depending on division and 444 00:26:52,680 --> 00:26:56,119 Speaker 1: it varies between b SM Sports, Varsity Spirit and herf shones. 445 00:26:56,359 --> 00:26:58,880 Speaker 1: But what we have done is important is kept our 446 00:26:59,080 --> 00:27:02,920 Speaker 1: two thousand cell in the marketplace. Uh not on furlough, 447 00:27:02,960 --> 00:27:06,040 Speaker 1: but in the market this entire pandemic. It's been expensive, 448 00:27:06,119 --> 00:27:08,200 Speaker 1: it's been a real investment by the company, but it's 449 00:27:08,240 --> 00:27:11,720 Speaker 1: increased the engagement. We're using these tools like virtual graduation. 450 00:27:12,280 --> 00:27:15,160 Speaker 1: We had never nearly a thousand virtual graduations. This year 451 00:27:15,320 --> 00:27:18,359 Speaker 1: they help two hundred and fifty kids graduated virtually, and 452 00:27:18,520 --> 00:27:23,040 Speaker 1: virtual fittings and cheer competitions that are online um through 453 00:27:23,119 --> 00:27:25,760 Speaker 1: Varsity Spirit. These kind of events helped the schools stay 454 00:27:25,800 --> 00:27:29,160 Speaker 1: engaged with the kids. Were doing virtual press conferences through 455 00:27:29,200 --> 00:27:31,399 Speaker 1: sport and through the athletic directors and the coaches, so 456 00:27:31,480 --> 00:27:33,960 Speaker 1: they look like a college coach or a professional coach 457 00:27:34,000 --> 00:27:36,080 Speaker 1: when they're having these meetings with their kids and they're 458 00:27:36,080 --> 00:27:38,800 Speaker 1: talking to their parents. All of these tools, which have 459 00:27:38,880 --> 00:27:41,960 Speaker 1: been candidly invented over the last three months, would have 460 00:27:42,040 --> 00:27:44,800 Speaker 1: taken us three years during normal times. Has been kind 461 00:27:44,800 --> 00:27:47,399 Speaker 1: of the secret sauce to stay engaged with these schools 462 00:27:47,400 --> 00:27:50,879 Speaker 1: and keep the kids engaged with their coaches and their administrators. 463 00:27:52,080 --> 00:27:54,240 Speaker 1: How about on the sports side. What what are you 464 00:27:54,240 --> 00:27:56,439 Speaker 1: finding the schools are thinking about their fall sports schedule. 465 00:27:57,640 --> 00:28:00,000 Speaker 1: You know, it's a mixed bag. Um, We've got an 466 00:28:00,080 --> 00:28:01,919 Speaker 1: number of delays. So I will tell you that the 467 00:28:01,960 --> 00:28:04,879 Speaker 1: pre eminent thought is to delay until the middle of 468 00:28:04,880 --> 00:28:08,280 Speaker 1: September end of September, but still have the sports season. 469 00:28:08,680 --> 00:28:11,879 Speaker 1: Some schools are talking about having the games without the fans, 470 00:28:11,960 --> 00:28:14,840 Speaker 1: or having the fans socially distanced. Um. There are other 471 00:28:14,880 --> 00:28:18,119 Speaker 1: parts of the country, namely the Southeast, where sports are 472 00:28:18,160 --> 00:28:21,880 Speaker 1: starting on time and there are no restrictions with respect 473 00:28:21,920 --> 00:28:24,600 Speaker 1: to who plays or who comes to the games and watches. 474 00:28:24,880 --> 00:28:26,800 Speaker 1: And then in the Northeast you have examples of some 475 00:28:26,880 --> 00:28:30,280 Speaker 1: schools that are differring uh sports until later in the 476 00:28:30,320 --> 00:28:32,320 Speaker 1: fall or into the winter. So you know, to the 477 00:28:32,320 --> 00:28:35,040 Speaker 1: earlier comment, it really is a mixed bag out there. 478 00:28:35,200 --> 00:28:37,840 Speaker 1: I think over the next thirty days, if there's a 479 00:28:37,880 --> 00:28:42,400 Speaker 1: stabilization with what's going on with infection rates, hospitalization, mortality, 480 00:28:42,600 --> 00:28:44,280 Speaker 1: I think you're going to see schools come to a 481 00:28:44,320 --> 00:28:47,719 Speaker 1: firm conclusion they have to by nature of the academic calendar, 482 00:28:47,960 --> 00:28:49,479 Speaker 1: and by the middle the end of August, I think 483 00:28:49,480 --> 00:28:52,000 Speaker 1: you're gonna need decisions be made on how to actually 484 00:28:52,040 --> 00:28:53,920 Speaker 1: come back with the sports in the fall. And I'm 485 00:28:53,920 --> 00:28:56,400 Speaker 1: real quick because we're out of time, but you do employe. 486 00:28:56,600 --> 00:28:59,479 Speaker 1: Varsity itself employs around about nine thou have you had 487 00:28:59,520 --> 00:29:02,880 Speaker 1: to make offs? Are you considering furlows layoffs? We have 488 00:29:03,040 --> 00:29:06,120 Speaker 1: had layoffs. We have had furloughs. We are doing everything 489 00:29:06,160 --> 00:29:09,920 Speaker 1: we can to keep employees employed and bring people back 490 00:29:10,040 --> 00:29:13,120 Speaker 1: to the business. And our number one focus beyond safety 491 00:29:13,120 --> 00:29:15,880 Speaker 1: and security is getting all of our teammates back into 492 00:29:15,920 --> 00:29:19,920 Speaker 1: the family as fast as possible. Very interesting, Adam Blumenfeld, 493 00:29:20,000 --> 00:29:23,440 Speaker 1: CEO of Varsity Brands. We really appreciate that UH schools 494 00:29:23,440 --> 00:29:26,560 Speaker 1: trying to figure this out, um and both from an 495 00:29:26,560 --> 00:29:29,920 Speaker 1: academic perspective and then an extracurricular perspective, And as Adam 496 00:29:30,040 --> 00:29:32,840 Speaker 1: was mentioning, kind of a patchwork across the country, no 497 00:29:32,920 --> 00:29:35,280 Speaker 1: real consistency, but I think the local communities are trying 498 00:29:35,280 --> 00:29:38,160 Speaker 1: to figure out what works best for them and as 499 00:29:38,160 --> 00:29:40,520 Speaker 1: well as you know, again academically than sports and all 500 00:29:40,520 --> 00:29:45,680 Speaker 1: the extra curriculars. Very interesting perspectively there. Thanks for listening 501 00:29:45,720 --> 00:29:48,920 Speaker 1: to the Boomberg Markets podcast. You can subscribe and listen 502 00:29:48,960 --> 00:29:52,520 Speaker 1: to interviews at Apple Podcasts or whatever podcast platform you 503 00:29:52,640 --> 00:29:55,920 Speaker 1: prefer I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn. 504 00:29:56,120 --> 00:29:58,480 Speaker 1: And I'm Paul Sweeney. I'm on Twitter at pt Sweeney. 505 00:29:58,520 --> 00:30:01,080 Speaker 1: Before the podcast, You Can oh Is, catch us worldwide 506 00:30:01,080 --> 00:30:03,520 Speaker 1: at Bloomberg Radio m