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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.

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Speaker 2: This is the BlueBag Day vi q At podcast. Good morning,

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Speaker 2: It's Friday, the seventh of November. I'm Caroline Hepcitt in

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Speaker 2: London and.

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Speaker 1: I'm Stephen Caroline Brussels. Coming up today, Tesla shareholders approve

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Speaker 1: Elon Musk's record breaking one trillion dollar pay packet.

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Speaker 2: Open Ai CEO Sam Altman rejects the need for government

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Speaker 2: bailouts as lofty tech valuations way on the market.

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Speaker 1: Plus global studies how the UK's VAT squeeze is driving

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Speaker 1: Britain's top private schools to chase new money overseas.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: Tesla's shareholders have approved a one trillion dollar compensation package

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Speaker 1: for CEO Elon Musk. More than seventy five percent of

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Speaker 1: votes were cast in favor of the payout. It clears

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Speaker 1: a path from Musk to expand his take in Tesla

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Speaker 1: to twenty five percent over the next Decade's Bloomberg TeX's

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Speaker 1: Ed Ludlow.

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Speaker 3: For Elon Musk, this was about having more voting power

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Speaker 3: and voting control. And for those institutional investors that voted no,

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Speaker 3: they were worried about concentration of voting power that he

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Speaker 3: had and dilution for them. In the end, voters have

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Speaker 3: overwhelmingly come out seventy five percent of them or more

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Speaker 3: and said we're happy to hand over more control to

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Speaker 3: Elon Musk and keep him in the driver's seat to

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Speaker 3: realize these longer term goals in robotics in an autonomous.

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Speaker 1: Driving Bloomberg's ed Ludlow. To achieve the full payout, Moscow

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Speaker 1: will have to deliver on targets to significantly expand Tesla's

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Speaker 1: market value. The company's shares were a little changed in

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Speaker 1: thursday's postmarket trading.

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Speaker 2: Open AI's CEO Sam Altman says he doesn't want a

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Speaker 2: government bailout if the company's plans to spend one point

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Speaker 2: four trillion dollars on artificial intelligence go wrong. Writing on

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Speaker 2: social media, the boss of the world's most valuable startup

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Speaker 2: said he doesn't want government guarantees for its spending on

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Speaker 2: data centers. It comes after open AI's CFO Sarah Fryer

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Speaker 2: hinted at a role for the US government to backstop

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Speaker 2: financing for Ai in an interview on Wednesday. The comments

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Speaker 2: come as investors grow increasingly concerned over stretched AI valuations.

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Speaker 2: Ven Ram is Bloomberg's cross asset strategists.

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Speaker 4: By now, it's kind of almost universally acknowledged that we

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Speaker 4: are margining steadily towards an equity bubble. BAC and P

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Speaker 4: five hundred is stating at twenty six times prospective earnings.

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Speaker 4: The Nasdaq hundred are staggering thirty two times. Those are

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Speaker 4: levels that are punitive and have seldom proved sustainable in

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Speaker 4: the past. The thing with this rally, the rally this year,

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Speaker 4: is that you know almost every investor knows it's all

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Speaker 4: going to turn into pumpkins and mice at midnight. Only,

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Speaker 4: as Buffett would say, no one in the room as

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Speaker 4: a clock.

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Speaker 2: Ben Ram speaking there as the tech heavy Nasdaq felt

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Speaker 2: almost four percent from its record at the end of

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Speaker 2: last month, but it's still up nearly twenty percent so

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Speaker 2: far this year.

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Speaker 1: Hungary's Prime Minister Victor Orban visits the White House later,

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Speaker 1: hoping his friendship with Donald Trump can spare his country

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Speaker 1: from US sanctions on Russian oil. Bloomberg's Micaul Cubala has more.

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Speaker 5: A year after cheering Donald Trump's re election, Victor Orban

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Speaker 5: is coming to Washington with the raft of offers and

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Speaker 5: a request the Hungarian Prime minister wants a reprieve from

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Speaker 5: US sanctions on Russian oil. They threatened to raise fuel

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Speaker 5: prices back home and deepen troubles ahead of next year's election.

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Speaker 5: In Exchange, sources told Bloomberg he is coming to the

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Speaker 5: White House with pledges to purchase American leg and nuclear

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Speaker 5: fuel to scramble for deal. Marks an ironic turn for Orban.

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Speaker 5: He once counted on his ties to Trump for political gain,

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Speaker 5: but is now in damage control mode as the US

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Speaker 5: President titans penalties on Moscow. In Brussels, Michal Kubala Bloomberg

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Speaker 5: radio him.

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Speaker 2: In the UK, the Bank of England has warned that

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Speaker 2: Chancellor Rachel Reeves will deliver her budget and made weak investment,

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Speaker 2: rising unemployment and slowing growth. Central Bank held interest rates

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Speaker 2: at four percent in a five to four vote that

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Speaker 2: laid the groundwork for a December cut. Yesterday, the Bank's Governor,

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Speaker 2: Andrew Bailey told Bloomberg that the UK's monetary policy still

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Speaker 2: remains restrictive for the moment now.

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Speaker 6: In August, I would say I was concerned more on

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Speaker 6: the upside risk, but I think the news that we've

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Speaker 6: had subsequent to that has left me an a more

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Speaker 6: balanced possessions. So that was very much my view. But

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Speaker 6: as I said, as I've said a number of times,

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Speaker 6: we do need to see more evidence because so far

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Speaker 6: we've had one inflation number that's come in, you know,

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Speaker 6: under what we've orderally obviously good, we need to say

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Speaker 6: some more.

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Speaker 2: That was the Bank of England Governor Andrew Bailey. He

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Speaker 2: went on to say that he is committed to serving

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Speaker 2: out his full eight year term as governor. His comments

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Speaker 2: came after afore UK Lee denied your Farage told bluebergs

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Speaker 2: Michelle Hussainin that the governor had had quote a.

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Speaker 1: Good run comcasts and talks to buy ITV's media and

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Speaker 1: entertainment units in a deal that could value the business

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Speaker 1: at around two billion dollars. The conglomerate already owns rival

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Speaker 1: broadcaster Skies pay television business in Europe. Bloomberg understands the

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Speaker 1: same advisors who worked on that deal seven years ago,

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Speaker 1: Morgan Stanley and Roby Warshaw, are currently advising ITV. If

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Speaker 1: the deal does go through, the acquisition would dramatically shake

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Speaker 1: up the UK broadcasting landscape.

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Speaker 2: Goldman Sachs is promoting the smallest proportion of women to

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Speaker 2: managing director level since the CEO, David Solomon took the

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Speaker 2: top job in twenty eighteen. Bloomberg's Ewen Potts has more Now.

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Speaker 7: Goldman Sachs says that women make up twenty seven percent

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Speaker 7: of their new managing director class. That's down from thirty

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Speaker 7: one percent in the last set of similar promotions back

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Speaker 7: in twenty twenty three. It also breaks a trend of

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Speaker 7: consistent growth since twenty seventeen. CEO David Solomon's made numerous

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Speaker 7: public pledges to advance women and improve inclusivity, telling Congress

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Speaker 7: in twenty nineteen that a core part of his tenure

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Speaker 7: would be defined by that goal. In total, the bank

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Speaker 7: promoted six hundred eight staff to managing director. That's the

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Speaker 7: highest number in four years. In London, I'm you and

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Speaker 7: Pot's Spoomberg Radio.

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Speaker 1: Those are your top stories on the markets this morning.

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Speaker 1: Eurostock's fifty futures up a tenth of one percent. The

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Speaker 1: mscis Your Pacific Index is down by nine tens of

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Speaker 1: one percent. The Nicka and Tokyo currently one point three

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Speaker 1: percent lower as well. Wall Street futures are higher three

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Speaker 1: tenths for SMP Mini futures this morning, the ten year

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Speaker 1: treasury yield up two basis points at four point one percent.

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Speaker 2: In a moment, we'll bring you more on that staggering

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Speaker 2: pay deal that Tesla investors have approved for Elon Masker,

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Speaker 2: though obviously some strings and goals attached. Plus a special

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Speaker 2: report on how British private schools moves to expand abroad

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Speaker 2: haven't always gone exactly to plan. But another story is

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Speaker 2: also caught ari this morning voting for next year's Oscars.

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Speaker 2: It's not begun yet, but Bloomberg's Mark Ledorf has identified

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Speaker 2: some key titles to be watching out for. Will you

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Speaker 2: be watching any of these films, Stephen?

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Speaker 1: I'm going to try to do better this year than

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Speaker 1: I have in previous years because I feel like I've

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Speaker 1: missed out on every important film over the past I

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Speaker 1: don't know, decades, so it may be time for me

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Speaker 1: to get back into it. The name that Mark says

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Speaker 1: to what is sentimental value? It's mostly in Norwegian. A

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Speaker 1: family drama about his family trying to figure out what

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Speaker 1: to do with the family home after their mother's death.

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Speaker 1: Sounds fascinating from the director Jokim Treer. Part of a

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Speaker 1: broader trend that Mark identifies of more top quality films

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Speaker 1: that aren't in English.

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Speaker 8: This is something that we've seen creeping.

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Speaker 1: Up through the oscars as well, you know, breaking out

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Speaker 1: of the international film category and into the mainstream as well.

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Speaker 1: And more productions being made in the US that are

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Speaker 1: multi lingual as well, think of Amelia Perez being one

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Speaker 1: recent example of those as well. You know, everything everywhere,

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Speaker 1: all at once, there's so many of them now we're

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Speaker 1: seeing more multi lingual versions and this Mark says it's

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Speaker 1: thanks to streamers. They're making more international content. People are

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Speaker 1: getting more used to reading subtitles, for example.

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Speaker 8: And this has me internally cheering.

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Speaker 2: Yeah, and maybe a bit of a stretch for me,

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Speaker 2: maybe for you also, Stephen, But no, you're right. I

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Speaker 2: think maybe this is one of the big unexpected benefits

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Speaker 2: of the streamers. You know, people sometimes are concerned about

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Speaker 2: the flattening of global culture and you know, everything sort

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Speaker 2: of being made for an international, global audience, but for

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Speaker 2: the streamers, largely in the US. But I think this

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Speaker 2: is the kind of unexpected benefit, isn't it that you

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Speaker 2: get to watch programs in all sorts of different languages.

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Speaker 8: Well, look, maybe it's a piercing of the anglosphere.

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Speaker 1: Maybe we're moving away from a position where you know,

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Speaker 1: only we only consume in English language cultures in English

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Speaker 1: language speaking countries, and certainly, as someone who've recently relocated

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Speaker 1: to an extremely multi lingual city where it's speaking two

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Speaker 1: languages is not enough. I think that it's, you know,

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Speaker 1: a great thing that we should all be excited about

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Speaker 1: expanding our cultural horizons.

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Speaker 2: Love it. We will put a link to that story

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Speaker 2: in our show notes.

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Speaker 1: Well, that's bringing more now on the story from Tesla

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Speaker 1: and the one trillion dollar pay package that was approved

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Speaker 1: for elon Moscar transport reporter Danny Lee joins us now

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Speaker 1: for more. Danny, more than seventy five percent of Tesla's

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Speaker 1: shareholders backed this. Was it an easy choice for them?

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Speaker 9: I think for the individual shareholders, clearly big fans of Musk,

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Speaker 9: these are the typical kind of retail shareholders overwhelmingly would

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Speaker 9: have supported. But we saw this huge campaign over many weeks,

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Speaker 9: obviously led by chair Robin Denholm, to get people to

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Speaker 9: support this, including institutional shareholders. Of course, we've seen a

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Speaker 9: lot of advisory firms recommend voting against this pay package,

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Speaker 9: this outsized pay package for el Musk so there has

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Speaker 9: been a lot of deliberation, particularly online campaigning, for large

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Speaker 9: firms who hold test a stock to vote in favor,

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Speaker 9: and ultimately what potentially looked like was going to be

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Speaker 9: a very narrow vote was an overwhelming victory or consensus

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Speaker 9: that el Musk should be given such a goal, such

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Speaker 9: a juicy carrot, in order to carry out what he

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Speaker 9: wants to transform Tesla.

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Speaker 2: Yeah. Absolutely, you know, it's been quite a sort of

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Speaker 2: bruising exchange, hasn't it in some ways? But as you say,

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Speaker 2: Musk does have to achieve quite a hefty series of

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Speaker 2: benchmarks in order to get this money. Just talk us

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Speaker 2: through the goals and actually how achievable they look now?

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Speaker 9: Yeah, I think that the word to describe all of

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Speaker 9: this is very dizzying. Dizzying because Tesla right now is

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Speaker 9: a one point five trillion company. Elil Musk has to

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Speaker 9: take that to eight ft eight point five trillion, and

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Speaker 9: the kind of series of operational milestones he has to

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Speaker 9: subsequently achieve. For example, the high end is a four

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Speaker 9: hundred billion dollar adjusted to profitability. That's such a crazy number.

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Speaker 9: But you know, these are kind of the stretch goals

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Speaker 9: that the border is. So he also has to deliver

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Speaker 9: twenty million vehicles, sell a million robots and robotaxis. So

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Speaker 9: these are all things which are obviously clearly designed to

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Speaker 9: be stretched and it's not going to be an easy task.

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Speaker 9: Is as Eil Musk has been given this kind of

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Speaker 9: free reign to do what he needs. But at the

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Speaker 9: end of the day, this one trillion doesn't really matter

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Speaker 9: for el Musks so much. He was obviously recently awarded

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Speaker 9: thirty billion dollars by the Tesla board, but ultimately he

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Speaker 9: wanted control more control over Tesla to pursue the kind

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Speaker 9: of what he thinks are very valuable pursuits for his

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Speaker 9: kind of dreams, his vision around artificial intelligence, driverless vehicles.

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Speaker 9: So he will effectively be able to double his stake

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Speaker 9: and have more control over Tesla. So this is probably

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Speaker 9: the most important thing for him. And yeah, now he

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Speaker 9: has the backing from an overwhelming level of shareholders.

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Speaker 1: And with that backing in place, then does that give

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Speaker 1: Elon Musk license to you know, tie in some of

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Speaker 1: his other businesses as well. There was some talk of

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Speaker 1: that around this shareholder vote too.

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Speaker 9: Oh absolutely, I think for for el Musk, you know,

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Speaker 9: given he wears many hats, and has many roles this,

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Speaker 9: you know, this is a huge mandate for him and

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Speaker 9: obviously for Musk on stage talking to shareholders overnight flow

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Speaker 9: to the idea of of listing more of his companies

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Speaker 9: as well. So all of this, all of these things

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Speaker 9: to tie together, you know, will ultimately make him a

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Speaker 9: more powerful person and might ultimately help Tesla as well

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Speaker 9: as you know, if all of the ecosystems that Elil

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Speaker 9: Musk touches just becomes ever more valuable.

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Speaker 2: Yeah, it's a very interesting story, Danny. Thank you so

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Speaker 2: much for explaining it to us. Our transport reporter Danny

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Speaker 2: Lee there on Tesla and the big new pay package

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Speaker 2: that Elon Musk could secure. Stay with us. More from

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Speaker 2: Bloomberg Day BAQUB coming up after this. The UK's two

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Speaker 2: five hundred private schools are under pressure, this after the

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Speaker 2: last year's tax increase on fees backed by the government.

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Speaker 2: Though a recent booming British schools opening branches abroad has

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Speaker 2: proven lucrative, but some of the expansions have come with

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Speaker 2: some unsavory business partners and the potential for reputational damage.

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Speaker 2: Blomb Bigs team added by joins us now with this story.

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Speaker 2: Tima why are these schools so keen on opening branches

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Speaker 2: abroad overseas well?

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Speaker 10: Quite frankly, a lot of them are looking for fresh

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Speaker 10: revenue streams.

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Speaker 2: In a lot of cases, these.

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Speaker 8: Schools are very prestigious.

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Speaker 10: They've got centuries old brands and now some of them

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Speaker 10: are looking to capitalize on that. And it's a sector

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Speaker 10: that's booming. We've seen a tripling of the number of

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Speaker 10: British school campuses opening abroad since twenty seventeen. It's up

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Speaker 10: from fifty one to one hundred and fifty one. And

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Speaker 10: in terms of profits they've also exploded recently. It's up

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Speaker 10: eighteen times over the last decade, reaching twenty nine million

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Speaker 10: pounds in the last academic year. And for private schools

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Speaker 10: with charitable status, as most of them do have in

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Speaker 10: the UK, they don't pay corporation tax on overseas earning,

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Speaker 10: so they're keeping a good proportion of this income. And

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Speaker 10: when you also couple that with the fact that most

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Speaker 10: British schools who open abroad work with foreign business partners

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Speaker 10: on the ground who are able to assume most of

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Speaker 10: the costs associated with launching, it does make for quite

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Speaker 10: an attractive opportunity. And there's also demand from the parents

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Speaker 10: abroad who otherwise would be sending their children overseas to

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Speaker 10: the UK.

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Speaker 8: This is a cheaper option.

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Speaker 10: It allows them to still access that British education but

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Speaker 10: on their doorstep, and crucially, it allows them to pay

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Speaker 10: the fees in their local currency, and that makes a

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Speaker 10: big difference when you do take into account exchange rates

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Speaker 10: and looking back to the UK perspective and the landscape

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Speaker 10: over here, you've got cost pressures tied to the government's

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Speaker 10: introduction of vat on school fees. You mentioned. Pupils are

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Speaker 10: leaving the system at an accelerated rate according to these

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Speaker 10: private schools, and there's high inflation. So you can begin

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Speaker 10: to see why setting up shop abroad does become attractive.

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Speaker 1: What are the risks, though, Tea, for these schools of

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Speaker 1: going into business with foreign partners.

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Speaker 10: Well, these are the sorts of institutions that have educated

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Speaker 10: prime ministers, for example. Some of them have brands that

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Speaker 10: are so strong they're almost sort of intertwined with the

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Speaker 10: Britain to identity and history, and so I think the

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Speaker 10: main risk here is denting that image, specifically through the

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Speaker 10: association with foreign business partners. In the story about this,

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Speaker 10: which is out on the terminal. This morning, we cover

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Speaker 10: several openings like Rugby School in Lagos, Nigeria this September.

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Speaker 10: That's a project that's been financed by a firm called

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Speaker 10: the Chaggery Group. Their founder has faced several controversies. Just

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Speaker 10: one example is that he had to pay one point

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Speaker 10: eight million dollars to resolve allegations that he and others

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Speaker 10: violated US election laws in twenty twenty one, and that's

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Speaker 10: according to the US Department of Justice.

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Speaker 8: There's also openings elsewhere.

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Speaker 10: For example, Harrow's School is due to opening New York soon,

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Speaker 10: and that's been backed by an Indian firm called Amite

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Speaker 10: Education Group. That group had one of its business school

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Speaker 10: licenses revoked by Indian regulators back in two thousand and five,

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Speaker 10: and since then they've also been heavily criticized by US

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Speaker 10: politicians about this upcoming New York opening. One of them

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Speaker 10: said they were really skeptical about Amiti's ability to educate

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Speaker 10: US students, just given its lack of track record in

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Speaker 10: the country. So with these business partners, I think schools

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Speaker 10: aren't just risking their reputations here, they're also risking the

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Speaker 10: trust of customers both abroad and in the UK who

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Speaker 10: are paying significant amounts of money to access that history

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Speaker 10: and what they believe is also a higher standard of education.

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Speaker 10: But perhaps what they don't expect is proximity to controversy,

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Speaker 10: especially through the foreign actors.

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Speaker 2: The thing I found interesting about your reporting and then

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Speaker 2: I didn't really know is how the UK government is

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Speaker 2: actually involved in the process when it comes to opening

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Speaker 2: these schools abroad. Yeah.

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Speaker 10: I mean it's been for some time now quite an

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Speaker 10: explicit strategy under Theresa May's government. The Department for Business

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Speaker 10: and Trade actually did have a document about their international

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Speaker 10: education strategy and as part of this they planned to

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Speaker 10: encourage private schools from the UK to access international opportunities

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Speaker 10: and they did this by connecting providers and investors, and

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Speaker 10: this is actually still the case. I've spoken to the

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Speaker 10: DBT and they told me that they still do help

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Speaker 10: to introduce those schools that are interested in growing abroad

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Speaker 10: to potential business partners. They did stress that they do

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Speaker 10: encourage the schools to undertake their own due diligence. In

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Speaker 10: the case of Rugby in Lagos, for example, that project

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Speaker 10: seems to have received at least the stamp of approval

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Speaker 10: from the British High commission They sent a delegation to

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Speaker 10: visit the campus over the summer, and the High Commissioner

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Speaker 10: described it as an outstanding example of UK Nigeria collaboration.

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Speaker 10: But the government is also supported by people on the ground,

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Speaker 10: often known as export champions, and they're volunteers who are

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Speaker 10: experienced UK exporters who support other businesses in their international

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Speaker 10: trade journeys. I spoke to one of those people for

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Speaker 10: this story who worked closely with the government on the

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Speaker 10: opening of several schools abroad recently, and so it definitely

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Speaker 10: seems like this is still a priority for the government.

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Speaker 10: And perhaps that's not surprising because increasing exports is something

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Speaker 10: the Chancellor has discussed and is already part of her

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Speaker 10: economic strategy, so it's likely we'll see the government continue

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Speaker 10: to be involved in this process.

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Speaker 2: Yeah, really fascinating. Tiba Adabaio, thank you so much for

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Speaker 2: your reporting British private schools chase new money in New

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Speaker 2: York and Singapore. It's on the front page of the

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Speaker 2: Bloomberg dot co dot UK website and on the terminal.

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Speaker 2: Thank you.

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Speaker 8: This is Bloomberg Daybreak Europe.

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