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Speaker 1: This is Bloomberg Business Wait inside from the reporters and

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Speaker 1: editors who bring you America's most trusted business magazine, plus

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Speaker 1: global business, finance and tech news. The Bloomberg Business Week

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Speaker 1: Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

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Speaker 2: We want to get to one of the stories that

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Speaker 2: kind of had U shaking our heads again. It's among

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Speaker 2: our most read on the Bloomberg. It's not about the

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Speaker 2: big venture capital and tech firms that tapped into a

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Speaker 2: backstop and ended up with at least some of them

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Speaker 2: getting a billion dollars or more following the collapse of

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Speaker 2: Silicon Valley Bank.

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Speaker 3: Yeah, some truly unbelievable facts that we had previously kind

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Speaker 3: of known. I mean, we knew that there were, for example,

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Speaker 3: account holders with more than three billion dollars at SVB,

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Speaker 3: and they were made whole.

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Speaker 4: I think at the time, the idea was.

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Speaker 3: You've got to make everybody whole, or else we'll see

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Speaker 3: more bank runs all around the country. But in hindsight,

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Speaker 3: you might be you might be attempted to criticize regulators

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Speaker 3: for just giving away money to so many people who

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Speaker 3: already have so much right.

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Speaker 2: That weren't in any problem so or seemingly so.

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Speaker 3: I mean, if I A policy lost a billion dollars,

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Speaker 3: it would probably hurt, but not much.

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Speaker 4: I mean, they'd still be on yachts drinking champagne.

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Speaker 2: It's a lot, you know, I don't know about that,

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Speaker 2: but it is a legendary and very successful VC firm.

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Speaker 2: So let's get to it. This story is written by

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Speaker 2: our lazette Chapman and Jason Leopold.

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Speaker 5: Uh.

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Speaker 2: Let's get to it with Bloomberg News Financial regulations reporter

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Speaker 2: Ben Bain, who edited the story. He's on the phone

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Speaker 2: in DC, so Ben, come on in on. First of all,

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Speaker 2: what's the information that you guys, thanks to a freedom

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Speaker 2: of information request, what you.

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Speaker 4: Found and thanks to a mistake and a mistake.

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Speaker 6: There's that too, so so yeah, we what we saw

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Speaker 6: here was really kind of the most detailed information yet

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Speaker 6: of what were the top ten biggest depositors. That's Plicon

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Speaker 6: Valley Bank as it was collapsing back in March. And

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Speaker 6: what we saw was, you know, there there's some interesting

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Speaker 6: names you mentioned, you know, Sequoia Capital on there. They're

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Speaker 6: kind of right near the top of the list. They

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Speaker 6: had a billion dollars in deposits. Now It's not in

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Speaker 6: and of itself, you know, surprising or or even necessarily

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Speaker 6: news worded that Sequoya, which has about eighty five billion

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Speaker 6: dollars in assets under management, would have a billion dollars

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Speaker 6: in a bank account. But what is interesting about this

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Speaker 6: is that, if you recall, one of the big shickouts

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Speaker 6: from this March banking crisis was that the US government

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Speaker 6: took the extraordinary step came in and said, look that

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Speaker 6: two hundred and fifty thousand dollars limit that we have

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Speaker 6: as kind of a bedrock in this country for deposit insurance,

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Speaker 6: that's going to go away in the case of Silicon

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Speaker 6: Valley Bank depositors and also Signature Bank depositors, the other

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Speaker 6: bank that failed in March, because there's an economic necessity,

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Speaker 6: there's a need for businesses to keep running. Basically, the

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Speaker 6: thought is is that all these businesses had money in

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Speaker 6: these banks, and if they lost the money in those

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Speaker 6: deposit accounts, they couldn't turn the lights on Monday morning,

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Speaker 6: March twelfth, March thirteenth, Pardon me, So what's interesting about

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Speaker 6: seeing names like Sequoya, some of these big VC firms,

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Speaker 6: big technology firms with substantial deposit accounts in Silicon Valley

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Speaker 6: Bank that were effectively made whole or at least backstopped

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Speaker 6: by the US government. Is that Yes, Sure, there were

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Speaker 6: many many companies, many many tech startups that were backstopped

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Speaker 6: by the government stepping in. But there are also some

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Speaker 6: pretty big players. As you're mentioning, right, you know, a

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Speaker 6: billion dollars wasn't going to make Sequoia Capitals a lot

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Speaker 6: of business. They have eighty five billion. So you know,

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Speaker 6: it's just kind of a glimpse into some of the

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Speaker 6: tough choices of the government had to make when really

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Speaker 6: taking an extraordinary step here.

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Speaker 3: I wonder, ben if any of it was pre negotiated.

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Speaker 3: I mean, there were worries about a run for a

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Speaker 3: few hours at least right on the twelfth. And if

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Speaker 3: you had a billion dollars in the bank, you might

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Speaker 3: pick up the phone and call the fd I see

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Speaker 3: and say, listen, we're gonna pull it or are you

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Speaker 3: going to cover us?

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Speaker 6: Well, I don't, I don't, we don't. We don't have that,

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Speaker 6: you know, we don't have that reporting what we what

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Speaker 6: we you know, what we do what we do know

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Speaker 6: basically you know from this list, and you know it

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Speaker 6: was it was you know, we we did get it

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Speaker 6: through for the freedom of through Freedom Information Act requests,

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Speaker 6: and it wasn't you know, made public previously. Was that

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Speaker 6: you know, there were these large firms who certainly did

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Speaker 6: have you know, significant theft in technology and also in

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Speaker 6: other industries. So just that the story wasn't necessarily as

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Speaker 6: you know, two dimensional if you will, of many many

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Speaker 6: startups and many many small businesses needing to be able

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Speaker 6: to take their to posits right. They're also some very

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Speaker 6: very very big players. They relied in this bank, you know,

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Speaker 6: for many years.

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Speaker 3: By the way, the fd I SEE apparently mistakenly sent

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Speaker 3: you an unred acted document. They then asked you to

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Speaker 3: please like delete it and not publish it. Why what

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Speaker 3: did they want to redact?

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Speaker 4: Do you think?

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Speaker 7: Well, you know.

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Speaker 6: What the what the fd I SEE said was that

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Speaker 6: they you know, they had intended to partially withhold some

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Speaker 6: of the details and uh because it included you know,

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Speaker 6: confidential commercial or financial information. You know, this the details

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Speaker 6: of who had money you know in Silicon Valley Bank

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Speaker 6: as it was going down. I mean, this is a

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Speaker 6: sensitive information in the sense that you know, this is

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Speaker 6: basically who had the biggest deposits at this institution that

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Speaker 6: we've all been talking about for the last three or

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Speaker 6: four months. You know that said, uh, certainly that this

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Speaker 6: is part of the story of really one of the

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Speaker 6: financial stories of the year. So you know, it does

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Speaker 6: kind of fill in some details that the public didn't have.

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Speaker 2: What kills me is that the amount of money that

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Speaker 2: they had at these banks, right, you know that there's

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Speaker 2: only a certain amount in short, So I'm always kind

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Speaker 2: of like, why would you do this? I don't know,

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Speaker 2: I find that well.

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Speaker 3: Imagine how many banks they would have to put it

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Speaker 3: in if they only put two hundred and fifty grand in.

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Speaker 2: But I get it, but I just think it's kind

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Speaker 2: of you are potentially putting yourself in a votel. I know,

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Speaker 2: you assume that nothing's going to go wrong, but you

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Speaker 2: know what happens. Having said that, Ben go through some

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Speaker 2: of the other players. We talk abot about Sequoya, So

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Speaker 2: they got a billion dollars.

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Speaker 3: Shoes a billion they would by the way, if they

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Speaker 3: wanted to keep only two hundred and fifty grand in

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Speaker 3: each bank, they would have to find four thousand banks

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Speaker 3: in America.

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Speaker 2: I get it, actually I get it, but I mean,

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Speaker 2: so there's other investments you can do that are short

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Speaker 2: term that are also considered safe. Right, there's other things

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Speaker 2: that they can do. I don't know, is that what

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Speaker 2: everybody does?

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Speaker 1: Yeah?

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Speaker 3: I think that's that's what you have to do unless

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Speaker 3: you want to. I mean, there are only like five

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Speaker 3: or six thousand banks in the US, so Sequoia would

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Speaker 3: have to use every single one of them, like.

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Speaker 2: Pretty much, what does Apple and Amazon like, what do

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Speaker 2: they do with all their money?

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Speaker 4: That's Ben?

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Speaker 5: What do you think?

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Speaker 4: I mean, it's a good question, Ben, What do you think?

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Speaker 6: I mean? I think I think we also just we

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Speaker 6: have to keep in mind that this was an extraordinary event.

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Speaker 6: You know, there have been three bank failures in you know,

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Speaker 6: this year. I mean it doesn't mean that there won't

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Speaker 6: be others, and there haven't bailed theirs since the financial crisis,

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Speaker 6: but the amount of money that was held in these banks,

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Speaker 6: the amount of assets that these banks had, the sides

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Speaker 6: of the bank failures this year, I mean, this is

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Speaker 6: not a not a standard situation. So yes, there there

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Speaker 6: You know, there is definitely strategies where you don't keep

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Speaker 6: large amounts of money in one account. However, you know,

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Speaker 6: businesses need to run their businesses, they need to have

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Speaker 6: certain types of accounts to be able to make payroll,

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Speaker 6: to have accounts to be able right, yeah, to function.

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Speaker 6: So there, I mean, there is a distinction between interest

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Speaker 6: bearing accounts and non interest bearing accounts. And you know,

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Speaker 6: after the financial crisis, there was you know a now

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Speaker 6: sunseted exemption where you know, there was coverage for businesses

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Speaker 6: using non interest bearing accounts that could be well about

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Speaker 6: the two hundred and fifty thousand dollars and would it

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Speaker 6: would be covered. So now there's a push to actually,

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Speaker 6: you know, maybe rethink that list.

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Speaker 2: This sounds like a great Business Week story, like a

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Speaker 2: little white chart like like where all the money goes

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Speaker 2: and stuff like, but hey, Ben, before you go, because

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Speaker 2: we only have about forty forty five seconds. Who else

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Speaker 2: so got some money just quickly.

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Speaker 6: So so there's you know, there are some interesting uh

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Speaker 6: you know kind of kind of names on there. As

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Speaker 6: you make you with this list. One thing that kind

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Speaker 6: of jumped out to me that was interesting too is

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Speaker 6: that you know, on this list of and if you

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Speaker 6: if you added together ten ten depositors, is about thirteen

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Speaker 6: billion or a little bit less in total. Uh, more

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Speaker 6: than four billion was actually from Silicon Valley Bank. And

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Speaker 6: also Silicon SVB Financial Ink. So so you know, there

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Speaker 6: there is kind of this now and there is kind

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Speaker 6: of a you know, an ongoing piece of the the

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Speaker 6: bankruptcy proceedings relates to svb's financial the parent company for

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Speaker 6: who should actually get that money. So that's that's a

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Speaker 6: little bit of a side story. But you know, those

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Speaker 6: are a couple of other names that that jumped out.

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Speaker 6: But there's also you know, several tech firms. You know,

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Speaker 6: Bill dot Com was on there, you know, and and

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Speaker 6: just you know, and others as well. But certainly Sekoia

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Speaker 6: you know, is probably the best known bank for capital

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Speaker 6: firm in the world.

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Speaker 2: All right, well, good stuff, hey Ben, Thank you so much,

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Speaker 2: Ben Bay and he's Financial Regulations for report at Bloomberg News.

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Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us

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Speaker 1: or watch us live on YouTube.

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Speaker 2: It's been an interesting week, I think the last couple

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Speaker 2: of weeks geopolitically, you had Prime Minister Modi in the

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Speaker 2: US uh CEOs and the US leaders lining up. He

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Speaker 2: was at the White House. You had Anthony Blincoln working

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Speaker 2: and seemingly having success at mending the relationship with China,

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Speaker 2: only to have the President possibly trip it up again.

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Speaker 2: And then, of course all of this is the Russian

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Speaker 2: War rages on in Ukraine. So we thought it was

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Speaker 2: time to do a geopolitical gut check, and so we've

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Speaker 2: got a great voice to do just that.

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Speaker 4: Yes we do.

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Speaker 3: I'm pleased to welcome a guy who's become a friend

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Speaker 3: of mine over the years on our programs on radio

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Speaker 3: and television, Ed Price. He's a principal at a Ergo.

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Speaker 3: He's also a former British trade official, and he's an

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Speaker 3: expert in German issues and a fluent speaker of German,

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Speaker 3: which I appreciate as well. But he's recently been in

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Speaker 3: Ukraine and spending some time on the ground there and

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Speaker 3: made some really important contacts. So Ed, let me start

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Speaker 3: by asking you about the situation in Ukraine, especially as

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Speaker 3: we get you know, headlines right now that are really confusing.

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Speaker 3: Reports that Moscow, that Russia has bombed camps of the

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Speaker 3: Wagner Group, which should be you know, this mercenary group

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Speaker 3: that we assume works for Russia.

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Speaker 4: Most of the time.

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Speaker 3: We're not sure if those reports we haven't verified them,

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Speaker 3: I should say, independently. But it's very messy on the

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Speaker 3: ground over there, isn't it, and difficult to kind of

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Speaker 3: figure out exactly what's going on and who's winning.

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Speaker 7: Right I mean, I'll start by saying, I think your

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Speaker 7: German's a bit better than mine. It is messi over

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Speaker 7: in Russia right now. I think probably what's happening is

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Speaker 7: that Progrosion has crossed the line and I wouldn't be

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Speaker 7: surprised at all if he comes to a sticky end

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Speaker 7: quite quickly, and we'll probably we'll probably hear reports of that,

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Speaker 7: or he'll be confined or something other will happen.

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Speaker 4: To He's the head of the Mercenary group, the Wagner group.

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Speaker 7: Right, Yes, the head of the Wagner Group. I mean

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Speaker 7: that some of his on camera addresses are completely bonkers.

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Speaker 7: And he's now he's now engaging, as you saw today

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Speaker 7: in conspiracy theories that essentially call out the entire Russian

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Speaker 7: apparatus and describe Russia as something of a circus? Is

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Speaker 7: he defending putin kind of? I feel like he's begging

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Speaker 7: for his life.

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Speaker 2: Honestly, Well, yeah, I mean, what did you see when

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Speaker 2: you were on your trip to Ukraine? And hello, hello,

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Speaker 2: how are you well?

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Speaker 7: Well? For for twenty four hours I saw the inside

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Speaker 7: of a night train from Poland because of course there

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Speaker 7: are no flights. But after that I met with the

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Speaker 7: finance minister and others, and really what I discovered is

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Speaker 7: that the Ukrainians are mobilized in a way that's quite spectacular.

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Speaker 7: They have high morale, they are definitely trying to conform

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Speaker 7: to NATO requirements, EU membership requirements. They're trying to root

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Speaker 7: out corruption, and they're trying to do that at the

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Speaker 7: same time as fighting this brutal war. Now, you know,

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Speaker 7: we probably should talk about the progress or otherwise of

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Speaker 7: the offensive, and my current understanding is that the Ukrainians

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Speaker 7: have only actually put three of their twelve mechanized brigades

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Speaker 7: into the fight because they're on an interior line. They're

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Speaker 7: trying still to probe and push the Russians and get

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Speaker 7: the Russians to misallocate their forces before punching through.

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Speaker 3: Why do you think the Ukrainians are so focused domestically?

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Speaker 3: And I understand that they want to retake the land

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Speaker 3: that Russia has annexed. But why don't they hit Russia

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Speaker 3: on its own soil?

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Speaker 7: Well, I mean, this is it. It's hard to tell.

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Speaker 7: On the surface of things. You might say that the

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Speaker 7: West we have been very clear that if they do that,

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Speaker 7: they're in a lot of trouble. But then that's a

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Speaker 7: bit odd because we gave them the means to do it,

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Speaker 7: not least the storm shadow system, which is some pretty

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Speaker 7: spectacular kit. I think that they are masters of the

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Speaker 7: pr game. I think that they're very very good at

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Speaker 7: understanding that this war is being fought in an information space,

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Speaker 7: and I think that the one thing they don't want

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Speaker 7: to do is to commit a mistake Heaven forbid, some

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Speaker 7: sort of atrocity that changes their wild card, which is

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Speaker 7: public opinion out here in the West. I mean, Zelenski's

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Speaker 7: been clear already that he's worried that at some point

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Speaker 7: the American presidency or the American people could lose interest.

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Speaker 7: So I think they're being cautious. That said, if they

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Speaker 7: want to do it, they will.

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Speaker 2: So you know, I mean year anniversary and I hate

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Speaker 2: to say anniversary, but they you know, year marking the

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Speaker 2: invasion of Russia into Ukraine. You know, we've talked to

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Speaker 2: about this. Where are you anticipating this war goes from

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Speaker 2: here based on what you're seeing and what you're hearing.

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Speaker 7: Well, Carol, it's as I said before, it's a brutal

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Speaker 7: ground war in and I think that I was thinking

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Speaker 7: about this this morning at a time.

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Speaker 2: When we thought ground wars didn't exist anymore. It's like

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Speaker 2: kind of mind blowing. Please continue.

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Speaker 7: Well, it's like it's like inflation, right, it's like efficient

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Speaker 7: market hypothesis. It's all these things that we think can't

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Speaker 7: happen and do. And I was thinking about it this morning,

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Speaker 7: saying to myself, well, look, if this wasn't twenty twenty three,

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Speaker 7: but if this was nineteen eighty three, then the headlines

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Speaker 7: would be that NATO weapons, NATO munitions were killing Soviet

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Speaker 7: soldiers in Europe, And that sort of jolted me while

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Speaker 7: I was cleaning my teeth. But the point is that

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Speaker 7: this is this is a terrifying war. It doesn't seem

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Speaker 7: that there's a military solution, and so the really difficult

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Speaker 7: thing is how and when do you get the Ukrainians

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Speaker 7: to sit down and even think about agreeing that they've

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Speaker 7: lost some sort of territory in order that the Russians

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Speaker 7: are given a negotiated peace. I don't know what you

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Speaker 7: guys think about this, but I can't really figure out

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Speaker 7: whether Zelenski is popular because he's refused to do that,

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Speaker 7: or popular enough to turn on a dime and actually

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Speaker 7: do it.

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Speaker 3: But at this point, it looks like they're not going

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Speaker 3: to do that, right. I mean, they've proven over the

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Speaker 3: last year that they're willing to die to hold their country.

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Speaker 3: How strong is Vladimir Putin? You know? Does he lose

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Speaker 3: some of his support as now I think more than

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Speaker 3: two hundred thousand Russian soldiers have lost their lives in

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Speaker 3: his war. Does he lose some of his support at home?

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Speaker 7: Well, if you remember, Matt, when we first spoke about this,

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Speaker 7: I suggested to you that I thought Russian might fall apart,

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Speaker 7: and that might have been the fever dream of a

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Speaker 7: hawkish Westerner. He does seem okay now. It seems that

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Speaker 7: he's managed to protect himself from assassination. It seems that

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Speaker 7: he has some sort of command structure that's still working.

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Speaker 7: I mean, they're still at war. And if you ask

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Speaker 7: the Ukrainians, look what would happen if Peuden wasn't there?

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Speaker 7: They say it doesn't matter because the rest of Russia

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Speaker 7: thinks and acts in the same way. But again, this

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Speaker 7: we're entering the phase of this war now, particularly with

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Speaker 7: the Damn incident, that anything could happen. And on the

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Speaker 7: other side, I mean, you know, it's not impossible that

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Speaker 7: he's assassinated, it's not impossible that he's placed under house arrest.

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Speaker 7: So he seems okay now, but I think he is

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Speaker 7: probably starting to wonder about how this thing ends too.

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Speaker 3: How much power does the Wagner group actually have? You know,

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Speaker 3: we read so much about them in the media because

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Speaker 3: they're a colorful bunch, But could they could they turn

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Speaker 3: the tide if they turn somehow against the Russians.

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Speaker 7: Well, that's super interesting. I mean, I think I think

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Speaker 7: that most of the Wagner group are dead, so they're

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Speaker 7: not doing anything. They're very Unwell, if there was a

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Speaker 7: scenario in which Russia descended into some kind of civil

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Speaker 7: descent or civil war, then anyone with the private army

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Speaker 7: is going to be having a good time of it.

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Speaker 7: And that goes for Wagner too. But I don't think

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Speaker 7: that Wagner itself is anything more than a symptom of

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Speaker 7: that potential. I don't see that Wagner's got enough agency

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Speaker 7: or or enough power to turn back into Russia and

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Speaker 7: challenge putin fully, like I say, I think progosion is

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Speaker 7: probably going to come to a sticky end.

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Speaker 2: We're all the allies in this, and I guess I

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Speaker 2: bring it up, and we've just got about a couple

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Speaker 2: of minutes here. I'm thinking of the Indian Prime Minister Modi,

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Speaker 2: you know, in white in Washington, meeting with President Biden

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Speaker 2: and other leaders here and other US leaders, and then

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Speaker 2: of course the corporate community in a big way and

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Speaker 2: really trying to attract a lot of investment to his country.

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Speaker 2: Having said that, he also India is a big buyer

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Speaker 2: Russian oil. So it's a tricky, you know, relationship. Do

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Speaker 2: these tricky relationships continue with the backdrop of the war.

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Speaker 7: They continue until they don't. And I would suggest that India,

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Speaker 7: if anything, has the deciding vote in World War three,

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Speaker 7: whether it happens who lines up against who and who wins.

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Speaker 7: If India swings over to a serious neutrality like it

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Speaker 7: used to, or if it, you know, heaven forbid, allies

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Speaker 7: itself with China and or Russia economically or otherwise, then

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Speaker 7: the West is in for a very difficult twenty first century. If,

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Speaker 7: as it seems right now, we can keep the Indians

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Speaker 7: on board, we may have a different story. So fingers crossed.

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Speaker 7: The Indians are going to lean into their democratic instincts

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Speaker 7: rather than their national.

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Speaker 3: But we're I think we're happy that they're buying Russia

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Speaker 3: crugh though twenties.

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Speaker 2: Otherwise, wait, wait twenty seconds. So is that what this

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Speaker 2: was all about in terms of DC. This big ament

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Speaker 2: was just to make sure we've got India on our side,

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Speaker 2: just very quickly, of course, I.

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Speaker 7: Mean what else is what else is Modi going to

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Speaker 7: get on an airplane for? And how else are we

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Speaker 7: going to welcome him?

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Speaker 2: Pretty well, because we talked about with our right artist

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Speaker 2: every first place us listen, I wish we had always

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Speaker 2: I always feel like ed. We always want more and

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Speaker 2: more and more time. So come back soon, have a

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Speaker 2: good weekend. Always good to get a check with Ed Price,

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Speaker 2: principal at Ergo, former British Trade official, vice members of

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Speaker 2: the European and British Parliament's worked in the City of London.

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Speaker 3: Has two master's degrees, one in finance and economics and

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Speaker 3: one in German history.

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Speaker 2: Sorry to hear he's such an underachiever. Yeah, all right, folks,

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Speaker 2: you're listening to Bloomberg Business Week, and this is Bloomberg Radio.

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Speaker 1: You're listening to the Bloomberg Business Week Podcast. Catch us

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00:19:17,680 --> 00:19:21,680
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,

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00:19:21,880 --> 00:19:25,160
Speaker 1: the Bloomberg Business app, and YouTube. You can also listen

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00:19:25,240 --> 00:19:28,359
Speaker 1: live on Amazon Alexa from our flagship New York station.

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00:19:28,800 --> 00:19:32,879
Speaker 1: Just say Alexa, play Bloomberg eleven thirty.

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Speaker 2: I gotta say this next guest. His company. It's been

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Speaker 2: described by some as Formula one on the water. It

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Speaker 2: involves fast paced and high tech fifty foot hydrofoiling race boats.

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Speaker 2: They're catamarans from different nations and they're all racing against

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Speaker 2: one another. We're both pretty.

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Speaker 3: We're both pretty site. I mean, I grew up sailing

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Speaker 3: and haven't been lately. You go sailing all the time,

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Speaker 3: and I think we both like racing.

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Speaker 4: So let's get to it.

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Speaker 2: He's a five time America's Cup win. Let's laid out there.

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Speaker 2: He was three times a skipper in those winnings of

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Speaker 2: the Cup. He's an Olympic champion as well. We welcome sir,

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Speaker 2: Sir Russell Coots excuse me, ce have sl GP with

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Speaker 2: us on Zoom and New Zealand. Sir Russell, it is

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Speaker 2: so nice to have you here with us.

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Speaker 4: Tell us a little bit about SALGP SALESGP.

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Speaker 2: I keep wanting to say GBT because we're so talking

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Speaker 2: about AI all the time.

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Speaker 5: Well, thanks Carol, and thanks man. It's great to be here.

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Speaker 5: Can you hear me? Okay, yes, yes, yes.

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Speaker 8: Okay, well yeah salve GP. Yes, it's it's it's certainly

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Speaker 8: exciting Grand Prix racing on water. It's I think we're

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Speaker 8: one of the fastest growing new sports and entertainment properties.

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Speaker 8: As you've described, Carol, we feature high speed racing between

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Speaker 8: rival nations, close to shore racing, with an expanded calendar

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Speaker 8: or expanding calendar of events as we as we develop,

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00:21:01,800 --> 00:21:07,000
Speaker 8: so our events span the globe, and we have the

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Speaker 8: top athletes in the sport racing and as you said,

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Speaker 8: identical very fast hydrofoiling fifty catamarans. In fact that at

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Speaker 8: top speed last year was set by the French team

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Speaker 8: just under one hundred kilometers.

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Speaker 5: Prayer, I think they were that.

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Speaker 2: Is crazy and like I was kidding with that, I sail.

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Speaker 2: I've sailed for thirty years and a top speed might

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Speaker 2: be eight nuts.

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Speaker 5: That is yeah, well.

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Speaker 8: In the US terms, I guess it's sixty two. It's

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Speaker 8: the equivalent of roughly sixty two miles perer. So you know,

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Speaker 8: we did driving along the freeway the speeds on water

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Speaker 8: of course, powered by nature.

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Speaker 4: That's the coolest thing.

437
00:21:54,520 --> 00:21:57,720
Speaker 3: So Russell I grew up as a Formula one fan

438
00:21:57,920 --> 00:22:00,600
Speaker 3: and since then have gotten smart and started watching Moto

439
00:22:00,680 --> 00:22:03,440
Speaker 3: GP because it's so much better. But both of those

440
00:22:03,440 --> 00:22:07,880
Speaker 3: sports are dirty, loud and dirty, right, just powered by

441
00:22:07,920 --> 00:22:10,879
Speaker 3: fossil fuels. And the cool thing about Sale GP is

442
00:22:10,920 --> 00:22:16,000
Speaker 3: that obviously you're powered by the wind, and in fact

443
00:22:16,080 --> 00:22:20,360
Speaker 3: you're in a way an impact organization, right, you're pushing

444
00:22:20,440 --> 00:22:23,040
Speaker 3: to fight climate change.

445
00:22:23,680 --> 00:22:27,320
Speaker 8: Absolutely well, well we'll certainly, you know, in terms of

446
00:22:27,359 --> 00:22:31,720
Speaker 8: our purpose, were I think fortunate to be a sport

447
00:22:31,800 --> 00:22:36,679
Speaker 8: powered by nature, and we are really champiing a world

448
00:22:36,680 --> 00:22:39,040
Speaker 8: powered by nature in other words, the wind, the sun

449
00:22:39,200 --> 00:22:42,159
Speaker 8: and the water, and our I guess our focus is

450
00:22:42,240 --> 00:22:47,840
Speaker 8: accelerating or showcasing the accelerating the transition to clean energy

451
00:22:48,720 --> 00:22:51,560
Speaker 8: as the number one global energy source.

452
00:22:51,640 --> 00:22:54,520
Speaker 5: So we're very passionate about that.

453
00:22:54,560 --> 00:22:58,040
Speaker 8: I think everyone in our organization is extremely passionate about it.

454
00:22:59,119 --> 00:23:01,920
Speaker 5: We have what we call an Impact League.

455
00:23:02,400 --> 00:23:05,240
Speaker 8: Athletes compete not only on the water, but they also

456
00:23:05,640 --> 00:23:09,720
Speaker 8: we also track the the carbon footprint and they look

457
00:23:09,800 --> 00:23:13,639
Speaker 8: to reduce that and they compete for points and then

458
00:23:14,280 --> 00:23:19,199
Speaker 8: and prize money is awarded to their impact partner. So

459
00:23:19,240 --> 00:23:21,119
Speaker 8: each of the teams has an impact partner and we

460
00:23:21,160 --> 00:23:22,120
Speaker 8: think that's pretty cool.

461
00:23:22,160 --> 00:23:23,160
Speaker 5: Actually, how do.

462
00:23:23,119 --> 00:23:25,679
Speaker 3: The teams get How do the teams make money? How

463
00:23:25,720 --> 00:23:27,840
Speaker 3: do the skippers get paid?

464
00:23:27,920 --> 00:23:30,359
Speaker 5: You know, because we're oh, they get they get paid.

465
00:23:30,480 --> 00:23:33,479
Speaker 8: They get paid fees like any other professional sport to compete,

466
00:23:33,480 --> 00:23:36,520
Speaker 8: but they also compete for prize money. So our prize

467
00:23:36,560 --> 00:23:39,040
Speaker 8: money is growing. So it's it's it's set at five

468
00:23:39,080 --> 00:23:43,199
Speaker 8: million dollars at this stage for season four and with

469
00:23:43,359 --> 00:23:47,840
Speaker 8: the final event being a million dollars. So, but they

470
00:23:47,880 --> 00:23:51,960
Speaker 8: also receive either a salary or fees to race on

471
00:23:52,000 --> 00:23:52,359
Speaker 8: the boat.

472
00:23:53,000 --> 00:23:55,600
Speaker 4: So how do we watch it? You know what with

473
00:23:56,359 --> 00:23:57,919
Speaker 4: I guess with Formula one.

474
00:23:57,960 --> 00:24:00,600
Speaker 3: Now in this country you can see it on on

475
00:24:00,680 --> 00:24:03,359
Speaker 3: TV depending what your cable provider is Moto GP. You

476
00:24:03,400 --> 00:24:06,240
Speaker 3: still have to have a subscription. Dorna sells those for

477
00:24:06,280 --> 00:24:08,000
Speaker 3: one hundred and sixty pounds a year. How do we

478
00:24:08,040 --> 00:24:09,159
Speaker 3: watch sale GP.

479
00:24:10,119 --> 00:24:13,680
Speaker 8: Well Salgp's distributed well now in season four to two

480
00:24:13,800 --> 00:24:17,159
Speaker 8: hundred and twelve different territories, so in the US you

481
00:24:17,200 --> 00:24:21,359
Speaker 8: can watch it on CBS or on YouTube, and we're

482
00:24:22,040 --> 00:24:26,000
Speaker 8: expanding that portfolio each year. So we've just announced new

483
00:24:26,040 --> 00:24:30,960
Speaker 8: deals with ITV in the UK and a five year

484
00:24:31,480 --> 00:24:35,680
Speaker 8: or five season extension with Kennel Polus in France. But

485
00:24:35,720 --> 00:24:40,320
Speaker 8: we are with many of the broadcasters Fox Australia, Discovery

486
00:24:40,680 --> 00:24:43,679
Speaker 8: in New Zealand, so each of our in each of

487
00:24:43,720 --> 00:24:49,960
Speaker 8: our key territories, we have key broadcasters. Our audience is

488
00:24:50,000 --> 00:24:54,000
Speaker 8: growing pretty rapidly, so we had a three times increase

489
00:24:54,119 --> 00:24:57,760
Speaker 8: over season two and season three. So our dedicated viewership

490
00:24:57,920 --> 00:25:00,720
Speaker 8: is around one hundred and seventeen just over one hundred

491
00:25:00,760 --> 00:25:06,480
Speaker 8: and seventeen million viewers, so that's just over if you

492
00:25:06,480 --> 00:25:09,480
Speaker 8: look at it, it's just over what is it ten

493
00:25:09,560 --> 00:25:15,120
Speaker 8: forards six million per event of dedicated viewership. And then

494
00:25:15,600 --> 00:25:23,560
Speaker 8: in terms of secondary viewership, which is obviously news and magazines,

495
00:25:24,240 --> 00:25:30,280
Speaker 8: we also had just under a billion views, so we're

496
00:25:30,320 --> 00:25:34,320
Speaker 8: growing pretty rapidly. Of that dedicated audience, about sixty percent

497
00:25:34,440 --> 00:25:38,920
Speaker 8: is linear TV and about forty in the forty percent digital.

498
00:25:39,240 --> 00:25:42,240
Speaker 2: So I'm curious about you, sir Russell. Are you do

499
00:25:42,320 --> 00:25:46,359
Speaker 2: you ever go out in a monohle and just a regular.

500
00:25:46,080 --> 00:25:49,040
Speaker 3: Sound because it's such a Carol's a traditional saler, it does.

501
00:25:49,119 --> 00:25:51,480
Speaker 2: I do feel like, you know, America's Cup kind of

502
00:25:51,520 --> 00:25:54,880
Speaker 2: got ruined years ago because.

503
00:25:54,600 --> 00:25:56,160
Speaker 4: It's I am such a harsh statement.

504
00:25:56,520 --> 00:26:00,399
Speaker 2: I'm sorry. I think it's not just about need, it's

505
00:26:00,400 --> 00:26:03,000
Speaker 2: about technique, and it's harder when you're going slower, it

506
00:26:03,040 --> 00:26:05,280
Speaker 2: really is. So I'm just curious how you see it.

507
00:26:06,760 --> 00:26:11,159
Speaker 8: Yeah, I mean, I like all forms of sailing, and

508
00:26:11,200 --> 00:26:14,840
Speaker 8: obviously I grew up racing traditional sail boats, but these

509
00:26:14,920 --> 00:26:18,920
Speaker 8: new classes are so fast and it still requires all

510
00:26:18,960 --> 00:26:22,480
Speaker 8: of the same skills, but it's just happening at a

511
00:26:22,520 --> 00:26:23,240
Speaker 8: much higher.

512
00:26:23,000 --> 00:26:26,640
Speaker 2: Speed, all right, So where do you go? I would

513
00:26:26,680 --> 00:26:30,080
Speaker 2: also go back to how you started this and why

514
00:26:30,119 --> 00:26:30,920
Speaker 2: you started it.

515
00:26:32,560 --> 00:26:38,080
Speaker 8: Well before selve GP, sailing didn't really have a global

516
00:26:38,119 --> 00:26:41,840
Speaker 8: platform to market the sport on an annual basis. So

517
00:26:42,359 --> 00:26:44,440
Speaker 8: when you look at what we're doing with seve GP,

518
00:26:44,560 --> 00:26:48,639
Speaker 8: it's not that different to what is considered normal in

519
00:26:48,720 --> 00:26:50,320
Speaker 8: most sports. So we.

520
00:26:51,960 --> 00:26:54,080
Speaker 5: Put together an annual calendar of events.

521
00:26:54,160 --> 00:27:01,600
Speaker 8: We obviously televised that live and promote it, you know, regularly.

522
00:27:02,760 --> 00:27:08,359
Speaker 8: So really, in many ways, it's intriguing to think that

523
00:27:08,480 --> 00:27:11,760
Speaker 8: sailing didn't have a platform like this before SALESGP. You know,

524
00:27:11,840 --> 00:27:17,040
Speaker 8: that we didn't have a regular professional calendar of events

525
00:27:17,040 --> 00:27:19,320
Speaker 8: where the top athletes in the sport race against each

526
00:27:19,359 --> 00:27:23,440
Speaker 8: other on a regular basis, and so that that's that's

527
00:27:23,520 --> 00:27:28,639
Speaker 8: really enabled us to market the sport more professionally and

528
00:27:29,160 --> 00:27:33,160
Speaker 8: more frequently, and the growth is really a result of that,

529
00:27:33,600 --> 00:27:36,280
Speaker 8: and I think in truth, we didn't really have a

530
00:27:36,320 --> 00:27:41,760
Speaker 8: platform that really delivered exciting racing before these new high

531
00:27:41,760 --> 00:27:46,160
Speaker 8: speed boats came along. So that's really been a transition,

532
00:27:46,320 --> 00:27:49,920
Speaker 8: as has the the sort of the I guess, the

533
00:27:50,760 --> 00:27:53,560
Speaker 8: way that we televise it these days, with our our

534
00:27:53,880 --> 00:27:57,120
Speaker 8: you know, broadcast graphics and so forth that are superimposed

535
00:27:57,160 --> 00:28:00,560
Speaker 8: over the video images. That really makes the sport more

536
00:28:00,640 --> 00:28:04,080
Speaker 8: understandable for the general sports fan and in particular the

537
00:28:04,160 --> 00:28:08,280
Speaker 8: racing fan. So we're not you know, with our audience growth,

538
00:28:08,280 --> 00:28:12,320
Speaker 8: we're not really seeing that growth in sailing fans per se.

539
00:28:13,040 --> 00:28:16,679
Speaker 8: We're seeing it in racing fans primarily and also in

540
00:28:16,720 --> 00:28:19,400
Speaker 8: general sports fans, So you know, that's exciting.

541
00:28:19,480 --> 00:28:22,160
Speaker 2: We're talking with Sir Russell Coots. He is the founder

542
00:28:22,240 --> 00:28:24,840
Speaker 2: and CEO of sal GP, still with us on Zoom

543
00:28:24,960 --> 00:28:29,399
Speaker 2: in New Zealand. So what's the plan going forward and

544
00:28:29,440 --> 00:28:31,920
Speaker 2: in terms of your growth expectations on how you want

545
00:28:31,920 --> 00:28:32,680
Speaker 2: to build this out.

546
00:28:34,240 --> 00:28:38,000
Speaker 8: Well, we started with six teams in season one and

547
00:28:38,040 --> 00:28:40,760
Speaker 8: we've grown that to ten teams at the beginning of

548
00:28:40,800 --> 00:28:45,240
Speaker 8: season four. And we started with five venues in season

549
00:28:45,280 --> 00:28:49,080
Speaker 8: one and now we're up to twelve venues in season four,

550
00:28:49,120 --> 00:28:52,280
Speaker 8: and ultimately we want to build to about.

551
00:28:54,160 --> 00:28:55,040
Speaker 5: Like Formula One.

552
00:28:56,040 --> 00:28:59,480
Speaker 8: They have roughly a race every two weeks if you

553
00:28:59,520 --> 00:29:02,320
Speaker 8: look at them of races that they do in a season,

554
00:29:02,800 --> 00:29:06,880
Speaker 8: and we want to achieve the same sort of consistency

555
00:29:06,920 --> 00:29:10,880
Speaker 8: of events. So we're looking to build the number of

556
00:29:10,920 --> 00:29:14,200
Speaker 8: events and probably build the number of teams to around

557
00:29:14,320 --> 00:29:19,480
Speaker 8: twelve teams obviously linked with the nationalities of their countries.

558
00:29:20,160 --> 00:29:21,520
Speaker 4: So the thing that.

559
00:29:23,080 --> 00:29:25,600
Speaker 3: Gets people watching Formula One is of course the drama

560
00:29:25,680 --> 00:29:29,239
Speaker 3: and the personalities kind of the soap opera more than

561
00:29:29,240 --> 00:29:31,600
Speaker 3: the races. Right, the same is true. You know, Motor

562
00:29:31,680 --> 00:29:33,760
Speaker 3: GP has been so interesting in the last couple weeks.

563
00:29:33,760 --> 00:29:37,240
Speaker 3: Will Mark Marquez go somewhere else and leave Honda? How

564
00:29:37,240 --> 00:29:40,080
Speaker 3: come the ducats are always winning. Do you have the

565
00:29:40,120 --> 00:29:44,320
Speaker 3: same kind of storylines you think in sailing?

566
00:29:45,600 --> 00:29:46,440
Speaker 5: Yeah? Absolutely.

567
00:29:46,560 --> 00:29:50,040
Speaker 8: I mean we actually produce a behind the scenes documentary

568
00:29:50,080 --> 00:29:53,000
Speaker 8: series called Racing on the Edge, which we distribute on

569
00:29:53,040 --> 00:29:57,640
Speaker 8: YouTube and also our key broadcasters also distribute that as well.

570
00:29:58,520 --> 00:30:01,280
Speaker 8: But we're looking to to do a similar thing to

571
00:30:01,320 --> 00:30:05,760
Speaker 8: what Formula One led with and other sports, which obviously

572
00:30:05,880 --> 00:30:10,400
Speaker 8: their drive to survive programming was extremely successful in terms

573
00:30:10,400 --> 00:30:13,960
Speaker 8: of promoting the sort of behind the scenes view of

574
00:30:14,600 --> 00:30:18,680
Speaker 8: athletes and building those personalities, and so we're looking to

575
00:30:18,720 --> 00:30:22,920
Speaker 8: do a similar thing in the future. And you know

576
00:30:23,000 --> 00:30:26,720
Speaker 8: that's I think that's pretty exciting for our sport, but

577
00:30:26,760 --> 00:30:31,400
Speaker 8: any sport these days, I think people really tune into

578
00:30:31,400 --> 00:30:34,160
Speaker 8: that sort of content and really engage with it.

579
00:30:34,240 --> 00:30:36,960
Speaker 5: So yeah, exciting times.

580
00:30:36,960 --> 00:30:39,520
Speaker 3: I think I'm looking at, by the way, video from

581
00:30:39,600 --> 00:30:42,840
Speaker 3: Racing on the Edge right now and I honestly have goosebumps.

582
00:30:42,880 --> 00:30:48,000
Speaker 3: I mean, the sailing is so sick is it dangerous?

583
00:30:48,120 --> 00:30:50,920
Speaker 3: I mean, at these speeds russe all with you know,

584
00:30:50,960 --> 00:30:52,719
Speaker 3: with the crew on one of these boats, if they

585
00:30:52,800 --> 00:30:55,680
Speaker 3: run into another one, I can imagine injuries.

586
00:30:56,960 --> 00:30:59,600
Speaker 8: Yeah, there's a there's certainly an element of danger, and

587
00:30:59,640 --> 00:31:02,880
Speaker 8: we obviously take the safety of the league. You know,

588
00:31:02,960 --> 00:31:07,720
Speaker 8: really it's obviously a priority for us. But it's you

589
00:31:07,720 --> 00:31:09,520
Speaker 8: know when people come along to our events and that

590
00:31:09,680 --> 00:31:12,960
Speaker 8: or they witness sol GP for the first time, that's surprise.

591
00:31:13,080 --> 00:31:14,880
Speaker 8: You know, they've got an image of sailing. I think

592
00:31:15,400 --> 00:31:18,480
Speaker 8: white triangles on a blue background would be a pretty

593
00:31:18,520 --> 00:31:19,480
Speaker 8: accurate image.

594
00:31:19,240 --> 00:31:23,800
Speaker 5: Of what most people cling. And this is so different,

595
00:31:23,880 --> 00:31:25,240
Speaker 5: you know to what that image.

596
00:31:26,320 --> 00:31:27,280
Speaker 8: Traditional image a.

597
00:31:27,280 --> 00:31:31,640
Speaker 2: Lot of money to go basically nowhere. But what's interesting

598
00:31:31,760 --> 00:31:33,640
Speaker 2: is you guys, with what you can do, you're close

599
00:31:33,680 --> 00:31:36,040
Speaker 2: to the shore, people can really see it and feel it.

600
00:31:36,320 --> 00:31:38,360
Speaker 2: And I do wonder about the speed in terms of

601
00:31:38,360 --> 00:31:42,200
Speaker 2: these boats, Sir Russell, in that it attracting kind of

602
00:31:42,360 --> 00:31:44,760
Speaker 2: a younger audience, right, I mean, you guys have to

603
00:31:44,800 --> 00:31:45,720
Speaker 2: be thinking about that.

604
00:31:47,040 --> 00:31:47,280
Speaker 5: Sure.

605
00:31:47,320 --> 00:31:49,720
Speaker 8: Well, we're also the way we format our programs, so

606
00:31:50,120 --> 00:31:53,840
Speaker 8: races over two days and ninety minutes, and we have

607
00:31:53,920 --> 00:31:57,720
Speaker 8: three races or fifteen minute races, three to fifteen minute

608
00:31:57,800 --> 00:32:01,760
Speaker 8: races per program. So that really is tailored to the

609
00:32:01,800 --> 00:32:07,640
Speaker 8: modern viewership sort of trends where audiences don't watch long

610
00:32:07,680 --> 00:32:10,120
Speaker 8: form content as much as what they used to. So

611
00:32:10,760 --> 00:32:14,200
Speaker 8: you know, quite often our viewers you tune into, they

612
00:32:14,280 --> 00:32:17,200
Speaker 8: might only tune into the final race, the final fifteen

613
00:32:17,200 --> 00:32:20,480
Speaker 8: minute race, and as a result of that, we are

614
00:32:20,520 --> 00:32:25,240
Speaker 8: seeing a younger demographic following this our racing.

615
00:32:26,000 --> 00:32:28,080
Speaker 2: Can I just say, I look at season three, episode nine,

616
00:32:28,080 --> 00:32:30,120
Speaker 2: and I think somebody fell in the fell in the.

617
00:32:30,080 --> 00:32:32,240
Speaker 4: Water, but it's still tied to the boat. So he's

618
00:32:32,320 --> 00:32:35,080
Speaker 4: like skimming across on the surface.

619
00:32:35,120 --> 00:32:38,520
Speaker 8: That was that was That was not Matt Gottrell from

620
00:32:38,560 --> 00:32:42,800
Speaker 8: from the UK team, and he actually he cracks some

621
00:32:42,920 --> 00:32:45,120
Speaker 8: ribs as a result of that, because you know, at

622
00:32:45,120 --> 00:32:48,720
Speaker 8: those speeds, hitting the water is like getting concrete. So

623
00:32:48,920 --> 00:32:51,800
Speaker 8: actually we made we reviewed that footage and obviously made

624
00:32:51,840 --> 00:32:57,240
Speaker 8: some adjustments to the to the safety equipment on board,

625
00:32:57,320 --> 00:32:59,200
Speaker 8: so so that can't happen again.

626
00:32:59,280 --> 00:33:03,880
Speaker 5: But yeah, it's there is an element of danger for sure, but.

627
00:33:03,760 --> 00:33:07,160
Speaker 8: There's you know, it's obviously hy adrenaline racing and I

628
00:33:07,200 --> 00:33:10,400
Speaker 8: think the top athletes, top sailing athletes in the world

629
00:33:11,120 --> 00:33:13,280
Speaker 8: really love this form of racing.

630
00:33:13,560 --> 00:33:18,040
Speaker 3: How have the sponsors reacted You can see some of

631
00:33:18,080 --> 00:33:25,040
Speaker 3: the sponsorship Oracle of course and other big companies, Emirates,

632
00:33:25,080 --> 00:33:29,240
Speaker 3: I see, how have the sponsors reacted after you know,

633
00:33:29,320 --> 00:33:30,720
Speaker 3: four seasons.

634
00:33:31,320 --> 00:33:34,760
Speaker 8: Well, the thing is that you know, we've we've we've

635
00:33:34,840 --> 00:33:39,160
Speaker 8: obviously grown pretty quickly commercially as well. And we've just

636
00:33:39,240 --> 00:33:44,040
Speaker 8: announced some new partnerships with Barla and Apex and they

637
00:33:44,240 --> 00:33:49,200
Speaker 8: join Rollick's, Oracle and near As as A as a

638
00:33:50,000 --> 00:33:54,120
Speaker 8: big sponsors and and and what the thing that we're

639
00:33:54,120 --> 00:33:58,160
Speaker 8: seeing is that these sponsorships are now or these partners

640
00:33:58,200 --> 00:34:02,600
Speaker 8: are now extending their partner ships to long term partnerships.

641
00:34:02,680 --> 00:34:08,719
Speaker 8: So we have a new tenure agreement with Rollicks, which

642
00:34:08,840 --> 00:34:12,440
Speaker 8: of course is fantastic to have such a premium brand,

643
00:34:12,880 --> 00:34:19,600
Speaker 8: you know, associated with our sport, and really our format,

644
00:34:19,800 --> 00:34:23,000
Speaker 8: just like other sports, is allowing these long term partnerships,

645
00:34:23,040 --> 00:34:26,480
Speaker 8: both with venues and you know, the commercial sponsors.

646
00:34:26,880 --> 00:34:30,000
Speaker 2: So just from a financial basis, and I'm just we've

647
00:34:30,080 --> 00:34:31,960
Speaker 2: just got about a minute or so or just under

648
00:34:31,960 --> 00:34:34,680
Speaker 2: a minute left here, So Russell, is this, I mean,

649
00:34:34,760 --> 00:34:37,239
Speaker 2: the goal to be profitable. Are you profitable? Like, how

650
00:34:37,280 --> 00:34:39,160
Speaker 2: do you think about it on a financial basis?

651
00:34:39,960 --> 00:34:42,920
Speaker 8: Yeah, we had a plan to be profitable by the

652
00:34:43,040 --> 00:34:45,640
Speaker 8: end of season five and we're tracking ahead of that

653
00:34:45,719 --> 00:34:49,160
Speaker 8: plan now. So we expect to see to be profitable

654
00:34:49,200 --> 00:34:53,480
Speaker 8: as a league by the end of this season season four.

655
00:34:55,160 --> 00:34:57,600
Speaker 8: And you know, our revenue sources are made up of

656
00:34:58,600 --> 00:35:03,799
Speaker 8: pretty similar to mo traditional sports, so we have obviously eventually.

657
00:35:04,600 --> 00:35:06,480
Speaker 5: Media will will be a big part of that.

658
00:35:06,719 --> 00:35:09,480
Speaker 8: But you know, right now our focus is on increasing

659
00:35:09,560 --> 00:35:13,239
Speaker 8: our audience rather than revenue in terms of in terms

660
00:35:13,320 --> 00:35:21,040
Speaker 8: of broadcast and media, but sponsorship and obviously ticketing, uh

661
00:35:21,440 --> 00:35:25,520
Speaker 8: you know, merchandising and so forth that the traditional revenue

662
00:35:25,960 --> 00:35:27,040
Speaker 8: that both sports have.

663
00:35:27,480 --> 00:35:30,120
Speaker 2: Well, so appreciate you finding some time for us. This

664
00:35:30,320 --> 00:35:32,800
Speaker 2: was really fun for us and look forward to hearing

665
00:35:33,000 --> 00:35:35,560
Speaker 2: from you in the future, hopefully about updates and how

666
00:35:35,600 --> 00:35:38,320
Speaker 2: things are going. Thank you so much. Have a great weekend.

667
00:35:38,400 --> 00:35:41,320
Speaker 2: So Russell Kutzi's chief executive officers also the founder of

668
00:35:41,400 --> 00:35:44,000
Speaker 2: sale GP, joining us via zoom from New Zealand. And

669
00:35:44,360 --> 00:35:46,279
Speaker 2: I mean check out some of the videos and.

670
00:35:46,320 --> 00:35:46,920
Speaker 4: Some of the races.

671
00:35:46,960 --> 00:35:49,480
Speaker 3: I mean, they just had an event in Chicago and

672
00:35:50,440 --> 00:35:54,600
Speaker 3: Los Angeles. Looks like finishes today and coming up Central Pay.

673
00:35:55,080 --> 00:35:57,640
Speaker 2: Very cool, Very cool, All right, folks, Bloomberg Business Week,

674
00:35:57,680 --> 00:36:00,200
Speaker 2: Carol Masser along with Matt Miller. We're so into this

675
00:36:01,280 --> 00:36:03,280
Speaker 2: and you are listening to Bloomberg Radio.

676
00:36:04,880 --> 00:36:08,920
Speaker 1: Brom a journal.

677
00:36:09,960 --> 00:36:10,360
Speaker 8: Now about you.

678
00:36:10,440 --> 00:36:10,960
Speaker 3: Let me drive.

679
00:36:11,239 --> 00:36:13,239
Speaker 6: Oh no, no, no, no, who's gone to drive?

680
00:36:14,320 --> 00:36:14,640
Speaker 3: Alright?

681
00:36:14,800 --> 00:36:16,719
Speaker 5: Please, I'll gravels.

682
00:36:17,120 --> 00:36:18,520
Speaker 4: Let's wait, I want to drive.

683
00:36:20,760 --> 00:36:21,600
Speaker 6: It's a good question.

684
00:36:25,480 --> 00:36:27,760
Speaker 1: This is the drive to the clothes.

685
00:36:27,600 --> 00:36:31,839
Speaker 5: Domk me effect well brind on Bloomberg Radio.

686
00:36:32,640 --> 00:36:35,440
Speaker 2: All right, everybody, we've got just about seventeen and a

687
00:36:35,440 --> 00:36:38,080
Speaker 2: half minutes left in today's trading session, getting ready to

688
00:36:38,440 --> 00:36:40,360
Speaker 2: wrap up the short and trading week. Four days and

689
00:36:40,480 --> 00:36:42,319
Speaker 2: all felt like not.

690
00:36:42,480 --> 00:36:44,960
Speaker 4: Four It true, it did feel you know what. I

691
00:36:45,120 --> 00:36:46,759
Speaker 4: I still like a four day work week.

692
00:36:46,760 --> 00:36:49,680
Speaker 3: A lot of people have been saying this week, we

693
00:36:50,320 --> 00:36:52,640
Speaker 3: have five days of work in four and it seems

694
00:36:52,760 --> 00:36:54,080
Speaker 3: so long and it feels harder.

695
00:36:55,160 --> 00:36:58,560
Speaker 4: I don't care a day, yes, exactly, yeah.

696
00:36:58,560 --> 00:37:00,839
Speaker 2: Yeah, totally all right, So let's get to it, and uh,

697
00:37:01,239 --> 00:37:04,520
Speaker 2: let's see what Sylvia Jablonski makes of the trade that

698
00:37:04,600 --> 00:37:06,960
Speaker 2: we got in this holiday shortened trading week. She's CEO

699
00:37:07,080 --> 00:37:10,040
Speaker 2: and chief investment officer. It defines ETFs. Back with us

700
00:37:10,120 --> 00:37:13,239
Speaker 2: on zoom in New York City, Sylvia, Happy Friday, Good

701
00:37:13,280 --> 00:37:16,560
Speaker 2: to have you here and back with us. So, I

702
00:37:16,600 --> 00:37:18,800
Speaker 2: don't know, how do you make sense? We're seeing a

703
00:37:18,800 --> 00:37:20,880
Speaker 2: little bit of a pullback. But as Matt reminds us.

704
00:37:21,560 --> 00:37:23,640
Speaker 2: You know, we've still had some pretty decent games here

705
00:37:23,800 --> 00:37:24,960
Speaker 2: and quite a bounce back.

706
00:37:26,360 --> 00:37:28,960
Speaker 9: Hi Carol, great to be with you today. For me,

707
00:37:29,040 --> 00:37:32,480
Speaker 9: this week has felt like ten days as well, so

708
00:37:32,640 --> 00:37:34,960
Speaker 9: I'd rather have the regular work week. I think the

709
00:37:35,040 --> 00:37:36,640
Speaker 9: market's been a little bit tough, and you know, I

710
00:37:36,719 --> 00:37:39,160
Speaker 9: come from a seat of you know, a big investor

711
00:37:39,360 --> 00:37:41,800
Speaker 9: in AI stocks and high growth and things like this.

712
00:37:42,040 --> 00:37:44,239
Speaker 10: So yeah, I mean, I think the FED is sort

713
00:37:44,280 --> 00:37:46,799
Speaker 10: of the hurricane that came into the market this week, and.

714
00:37:47,960 --> 00:37:50,120
Speaker 2: They can't just go higher and hire and hire these

715
00:37:50,200 --> 00:37:51,160
Speaker 2: day I stocks.

716
00:37:53,640 --> 00:37:55,640
Speaker 10: You know, I think that they have a ways to

717
00:37:55,760 --> 00:37:56,600
Speaker 10: go though, right.

718
00:37:57,560 --> 00:38:00,000
Speaker 9: You know, I'll take the argument that you know, there's

719
00:38:00,160 --> 00:38:02,000
Speaker 9: been a lot of growth over one hundred percent or

720
00:38:02,040 --> 00:38:04,160
Speaker 9: so in some of the semiconductor names and things like that,

721
00:38:04,400 --> 00:38:06,920
Speaker 9: but it is one of the hottest innovations that is

722
00:38:06,960 --> 00:38:09,560
Speaker 9: actually going to play out and will actually generate revenue

723
00:38:09,600 --> 00:38:11,480
Speaker 9: in coming years. But I think what happened in the

724
00:38:11,560 --> 00:38:14,279
Speaker 9: market this week, though, came to a little bit of

725
00:38:14,320 --> 00:38:18,000
Speaker 9: a halt because of j. Powell's testimony. Right, so he's

726
00:38:18,040 --> 00:38:20,719
Speaker 9: talking about potentially two more rates. He's definitely saying that,

727
00:38:21,160 --> 00:38:22,840
Speaker 9: you know, inflation remains.

728
00:38:22,480 --> 00:38:23,080
Speaker 10: The key issue.

729
00:38:23,120 --> 00:38:24,799
Speaker 9: We're not at two percent, and I think it put

730
00:38:25,000 --> 00:38:26,840
Speaker 9: a damper on the rally that we've seen for the

731
00:38:26,920 --> 00:38:30,040
Speaker 9: last couple of weeks. So you know, I think until

732
00:38:30,080 --> 00:38:32,480
Speaker 9: we get it goes back to that, that's the that's

733
00:38:32,520 --> 00:38:34,839
Speaker 9: the uncertainty in the market, and until that shakes out,

734
00:38:34,920 --> 00:38:37,240
Speaker 9: we're going to have these kind of range round weeks

735
00:38:37,280 --> 00:38:41,280
Speaker 9: and maybe some some you know, lazy rallies or pullbacks

736
00:38:41,280 --> 00:38:41,720
Speaker 9: in between.

737
00:38:42,200 --> 00:38:44,960
Speaker 3: What do you see from the flows because last week,

738
00:38:45,200 --> 00:38:49,520
Speaker 3: you know, Eric Alcunas has been tracking for for weeks

739
00:38:49,560 --> 00:38:53,759
Speaker 3: and weeks and weeks no flows into equity ETFs, even

740
00:38:53,840 --> 00:38:56,840
Speaker 3: as the market, you know, runs higher and higher, and

741
00:38:57,040 --> 00:39:00,279
Speaker 3: finally we got last week a shift and flows out

742
00:39:00,320 --> 00:39:04,680
Speaker 3: of you know, the short end fixed income ETFs into equities,

743
00:39:04,800 --> 00:39:08,320
Speaker 3: So like ETF investors were finally getting into this rally.

744
00:39:09,160 --> 00:39:10,240
Speaker 4: Has that continued?

745
00:39:12,120 --> 00:39:13,719
Speaker 9: Yeah, you know, I think there was a lot of

746
00:39:13,760 --> 00:39:17,400
Speaker 9: fomo out there, and you know, it looked like the

747
00:39:17,480 --> 00:39:20,520
Speaker 9: market was stabilizing, inflation was coming down. We kind of

748
00:39:20,560 --> 00:39:23,400
Speaker 9: got past that last FED meeting, and you know, up

749
00:39:23,440 --> 00:39:25,799
Speaker 9: until the comments and sach it looked like we were

750
00:39:25,880 --> 00:39:27,840
Speaker 9: kind of in the clear, at least for some stability

751
00:39:27,880 --> 00:39:28,279
Speaker 9: in the market.

752
00:39:28,360 --> 00:39:30,160
Speaker 10: So I think a lot of it was fomo. There's

753
00:39:30,160 --> 00:39:31,799
Speaker 10: a lot of liquidity on the sidelines.

754
00:39:32,080 --> 00:39:34,000
Speaker 9: As you said, investors had been in those short term

755
00:39:34,080 --> 00:39:37,000
Speaker 9: fixed income products or cash or you know, the Goldman

756
00:39:37,040 --> 00:39:39,880
Speaker 9: Sachs Apple account, whatever it might be, and they finally said, oh, okay,

757
00:39:40,120 --> 00:39:42,160
Speaker 9: I think I can make more than four percent and equity,

758
00:39:42,239 --> 00:39:44,080
Speaker 9: so let me get back in. And then when you

759
00:39:44,160 --> 00:39:45,920
Speaker 9: look at you know, kind of where the flows go,

760
00:39:46,600 --> 00:39:50,480
Speaker 9: places like AI, machine learning, quantum computing, you know, innovation.

761
00:39:50,840 --> 00:39:53,680
Speaker 9: This is where people get into ETFs. Right, it's hard

762
00:39:53,719 --> 00:39:55,479
Speaker 9: to pick the winners, so it kind of makes sense

763
00:39:55,520 --> 00:39:58,000
Speaker 9: that you would have seen the flows that you'd have seen.

764
00:39:58,239 --> 00:40:02,160
Speaker 10: I think it's going to continue. I actually, you know, as.

765
00:40:02,120 --> 00:40:04,839
Speaker 9: Much as I hate seeing kind of stock prices fall

766
00:40:04,920 --> 00:40:06,479
Speaker 9: and things like that on some of the top AI

767
00:40:06,640 --> 00:40:08,719
Speaker 9: names that we invest in too, I think that these

768
00:40:08,719 --> 00:40:11,279
Speaker 9: are great pull back by on the dip opportunities.

769
00:40:11,960 --> 00:40:13,200
Speaker 10: And then you've also seen.

770
00:40:13,040 --> 00:40:16,560
Speaker 9: Some great you know moves in areas like cruises and

771
00:40:16,719 --> 00:40:21,920
Speaker 9: hotels and you know kind of casinos and you know airlines. Right,

772
00:40:22,000 --> 00:40:24,200
Speaker 9: that's where the spending has gone from goods to services.

773
00:40:24,320 --> 00:40:25,879
Speaker 9: And for the next couple of months. You might see

774
00:40:25,880 --> 00:40:26,680
Speaker 9: performance there.

775
00:40:26,680 --> 00:40:29,719
Speaker 2: Sylvia though, and we did see some some nervousness among

776
00:40:29,840 --> 00:40:31,960
Speaker 2: some of the leisure stocks though, because certainly after those

777
00:40:32,000 --> 00:40:35,080
Speaker 2: PMI numbers out of Europe, I think there is concerns that,

778
00:40:35,320 --> 00:40:38,440
Speaker 2: you know, recession, no recession, maybe it looks more like recession,

779
00:40:38,600 --> 00:40:41,040
Speaker 2: So there's there's nervousness. I want to go back to

780
00:40:41,080 --> 00:40:43,319
Speaker 2: the tech names, because BFA came out and said tech

781
00:40:43,400 --> 00:40:45,719
Speaker 2: sector saw two billion dollars worth of outflows in five

782
00:40:45,800 --> 00:40:48,640
Speaker 2: trading days through June twenty first, it's the largest amount

783
00:40:48,680 --> 00:40:51,799
Speaker 2: in ten weeks. Some like you might say, okay, that's

784
00:40:51,840 --> 00:40:55,440
Speaker 2: a buying opportunity, but how do you fairly value some

785
00:40:55,600 --> 00:40:58,360
Speaker 2: of these names that are linked to AI? How do

786
00:40:58,440 --> 00:41:01,239
Speaker 2: you fundamentally kind of figure that out?

787
00:41:02,480 --> 00:41:03,520
Speaker 10: Yeah, and that's a great point.

788
00:41:03,560 --> 00:41:05,800
Speaker 9: I mean, I think everyone is kind of attaching the

789
00:41:05,840 --> 00:41:08,200
Speaker 9: word AI to what they do now because it sounds

790
00:41:08,280 --> 00:41:10,560
Speaker 9: really good. But you know, the way that we think

791
00:41:10,600 --> 00:41:13,000
Speaker 9: about it is we look at the different sectors and

792
00:41:13,120 --> 00:41:16,200
Speaker 9: companies that actually make up AI and generate revenue from AI.

793
00:41:16,320 --> 00:41:18,279
Speaker 9: So I think for investors it's important to look at

794
00:41:18,320 --> 00:41:21,359
Speaker 9: things like, you know, what is AI powered by?

795
00:41:21,520 --> 00:41:21,680
Speaker 2: Right?

796
00:41:21,760 --> 00:41:24,400
Speaker 10: And part of that is semiconductor, so you might have

797
00:41:24,640 --> 00:41:26,319
Speaker 10: names like Navidia and A M D and there.

798
00:41:26,400 --> 00:41:29,000
Speaker 9: And why I like those names is because they're quality companies.

799
00:41:29,280 --> 00:41:31,560
Speaker 9: They have strong balance sheets. You know, they're very much

800
00:41:32,000 --> 00:41:34,759
Speaker 9: kind of like drinking water for AI. You also need

801
00:41:35,440 --> 00:41:38,680
Speaker 9: machine learning, and you know, in order for machine learning

802
00:41:38,760 --> 00:41:41,000
Speaker 9: and AI to work, you need the process data quickly,

803
00:41:41,120 --> 00:41:44,279
Speaker 9: and for that you need supercomputer's quantum computers. So you

804
00:41:44,400 --> 00:41:48,800
Speaker 9: have companies like IBM looking you know in that space.

805
00:41:48,880 --> 00:41:51,280
Speaker 9: You have companies like Microsoft and Google who are already

806
00:41:51,440 --> 00:41:54,520
Speaker 9: we know in the AI race. So basically, at this point,

807
00:41:54,640 --> 00:41:56,960
Speaker 9: I think kind of the more short plays are in

808
00:41:57,000 --> 00:42:00,960
Speaker 9: the large cap space and maybe the you know, take

809
00:42:01,000 --> 00:42:03,160
Speaker 9: a kind of gander on it would be the small

810
00:42:03,200 --> 00:42:06,479
Speaker 9: cap and mid cap tech and semi conductor types of names.

811
00:42:06,520 --> 00:42:08,440
Speaker 9: But you still want to make sure that you know

812
00:42:08,480 --> 00:42:11,120
Speaker 9: they have balance sheet because if the FED does continue

813
00:42:11,160 --> 00:42:13,160
Speaker 9: to various rates, those are the names that get hit.

814
00:42:13,280 --> 00:42:16,359
Speaker 9: So again I'm kind of circling back to broad based

815
00:42:16,400 --> 00:42:19,880
Speaker 9: diversification in that looking at ETFs, but the big.

816
00:42:20,560 --> 00:42:23,480
Speaker 4: Uh, well, Nvidia is one that you still like.

817
00:42:23,680 --> 00:42:27,239
Speaker 3: Barclay's also says buy AI stocks on any pullback in

818
00:42:27,320 --> 00:42:30,360
Speaker 3: the rally and the big megacap tech stocks.

819
00:42:30,840 --> 00:42:34,759
Speaker 4: I heard yesterday Margie Patel, who is at.

820
00:42:34,680 --> 00:42:37,920
Speaker 3: All Spring Global Investments, say she thinks there's still momentum

821
00:42:37,960 --> 00:42:40,760
Speaker 3: there and as much as you hate seeing winners continue

822
00:42:40,800 --> 00:42:42,040
Speaker 3: to win, she's sticking with it.

823
00:42:42,160 --> 00:42:45,160
Speaker 9: Do you agree, Yeah, you know, I do agree, And

824
00:42:45,200 --> 00:42:48,520
Speaker 9: I think momentum has been you know, partially the name

825
00:42:48,520 --> 00:42:50,480
Speaker 9: of the game when it comes to a few sectors,

826
00:42:51,239 --> 00:42:54,320
Speaker 9: AI being one of them, in particular semiconductors, you know,

827
00:42:54,520 --> 00:42:56,839
Speaker 9: kind of the generals and the tech space that lead

828
00:42:56,880 --> 00:42:59,000
Speaker 9: the market, and also e B Right, I mean, there's

829
00:42:59,280 --> 00:43:02,000
Speaker 9: there's a lot of general momentum in the idea of

830
00:43:02,320 --> 00:43:05,480
Speaker 9: artificial intelligence in the future of technology and innovation. And

831
00:43:05,880 --> 00:43:07,600
Speaker 9: what's great about this is that a couple of years

832
00:43:07,600 --> 00:43:10,160
Speaker 9: ago we were kind of talking about, you know, there

833
00:43:10,200 --> 00:43:12,279
Speaker 9: was interesting kind of like far out ideas that might

834
00:43:12,320 --> 00:43:14,279
Speaker 9: not come to fruition for a decade or two.

835
00:43:14,440 --> 00:43:17,399
Speaker 10: And with the AI, I mean, it's already taking place.

836
00:43:17,520 --> 00:43:17,600
Speaker 2: Right.

837
00:43:17,680 --> 00:43:20,080
Speaker 9: You have robots replacing the people that fact you know,

838
00:43:20,600 --> 00:43:24,400
Speaker 9: put places like Amazon camp higher in their factories. You know,

839
00:43:24,520 --> 00:43:27,440
Speaker 9: defense systems are using AI, banks are using AI to

840
00:43:27,520 --> 00:43:30,279
Speaker 9: better kind of their their credit risk analysis and things

841
00:43:30,360 --> 00:43:32,200
Speaker 9: like this. So these are actually tangible things that we

842
00:43:32,239 --> 00:43:34,480
Speaker 9: can understand and see the revenue generation from.

843
00:43:34,880 --> 00:43:36,600
Speaker 10: And it played out in this earning season.

844
00:43:36,640 --> 00:43:39,239
Speaker 9: I think it's going to continue, meaning companies you know,

845
00:43:39,440 --> 00:43:41,600
Speaker 9: have called costs, so they did okay, and that'll continue

846
00:43:41,640 --> 00:43:42,120
Speaker 9: going forward.

847
00:43:42,239 --> 00:43:44,240
Speaker 2: So that you say earnings, I just checked JP Morgan

848
00:43:44,920 --> 00:43:47,839
Speaker 2: for its earnings in July fourteenth. Is that the steel day?

849
00:43:48,280 --> 00:43:49,799
Speaker 4: The still Yeah, that is best steel day.

850
00:43:49,880 --> 00:43:52,480
Speaker 2: Yeah. So we're just kind of around the corner. Sylvia,

851
00:43:52,560 --> 00:43:55,600
Speaker 2: have a great weekend. Sylvia Jablonski, CEO and CIO over

852
00:43:55,719 --> 00:43:58,080
Speaker 2: Defiance ETFs on zoom in New York City. This is

853
00:43:58,120 --> 00:43:58,880
Speaker 2: Bloomberg Radio.

854
00:44:01,440 --> 00:44:06,040
Speaker 1: This is the Bloomberg Business Week podcast, available on Apple, Spotify,

855
00:44:06,239 --> 00:44:09,960
Speaker 1: and anywhere else you get your podcast. Listen live weekday

856
00:44:09,960 --> 00:44:13,439
Speaker 1: afternoons from three to six Eastern on Bloomberg dot Com,

857
00:44:13,640 --> 00:44:16,919
Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business App.

858
00:44:17,000 --> 00:44:19,920
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859
00:44:20,200 --> 00:44:22,080
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