WEBVTT - Live Nation Reaches DOJ Settlement in Antitrust Case 0:00:02.720 --> 0:00:10.559 Bloomberg Audio Studios, podcasts, radio news. You're listening to the 0:00:10.600 --> 0:00:14.560 Bloomberg Intelligence podcast. Catch us Live weekdays at ten am 0:00:14.600 --> 0:00:17.840 Eastern on Apple, Cocklay and Android Auto with the Bloomberg 0:00:17.920 --> 0:00:21.040 Business App. Listen on demand wherever you get your podcasts, 0:00:21.360 --> 0:00:23.520 or watch us live on YouTube. 0:00:24.160 --> 0:00:27.480 Want to bounce off with Live Nation and our next guest, 0:00:27.600 --> 0:00:32.320 Jennifer Reed, Bloomberg Intelligence Senior Litigation analyst. Jennifer, thanks so 0:00:32.360 --> 0:00:34.519 much for coming in studio here. We don't know a 0:00:34.560 --> 0:00:37.640 lot about this Live Nation settlement, right, Maybe we should 0:00:37.640 --> 0:00:38.520 just start with what. 0:00:38.400 --> 0:00:38.879 Do we know? 0:00:39.479 --> 0:00:39.680 Right? 0:00:39.720 --> 0:00:41.519 And it's changing by the minute, by the way. I 0:00:41.600 --> 0:00:44.360 keep seeing new reports with new details. But it looks 0:00:44.400 --> 0:00:46.960 like at least one part of it is a divestiture 0:00:47.000 --> 0:00:50.239 that would be divesting large amphitheaters that are owned by 0:00:50.280 --> 0:00:53.520 Live Nation. The Department of Justice alleged that Live Nation 0:00:53.640 --> 0:00:56.240 owned sixty out of the one hundred top amphitheaters in 0:00:56.280 --> 0:00:59.080 the US, and the control over those amphitheaters, which the 0:00:59.200 --> 0:01:02.880 artists really needed for summer tours. Desire for summer tours 0:01:04.120 --> 0:01:06.039 was part of the problem some of the claims that 0:01:06.080 --> 0:01:08.920 were left in this litigation, so selling some of them 0:01:09.240 --> 0:01:10.959 opens them up to other promoters. 0:01:13.200 --> 0:01:17.000 Okay, I guess one big question people had was Ticketmaster. 0:01:17.120 --> 0:01:20.120 The fate of Ticketmaster and whether that stays with Live 0:01:20.200 --> 0:01:23.240 Nation or whether it's spun out or the company's forced 0:01:23.280 --> 0:01:25.720 to sell that. Do we have a firm answer as 0:01:25.720 --> 0:01:27.520 to what happens to Ticketmaster. 0:01:27.520 --> 0:01:28.440 Well not really. 0:01:28.480 --> 0:01:30.959 According to the DOJ settlement, it does not have to 0:01:31.000 --> 0:01:34.119 be sold. But there are forty states involved as well. 0:01:34.120 --> 0:01:36.760 They are also plaintiffs, and they also have the authority 0:01:37.200 --> 0:01:40.440 to litigate under federal antitrust laws just as the Department 0:01:40.480 --> 0:01:43.440 of Justice does, and not all of them have settled. 0:01:43.480 --> 0:01:45.760 According to the news reports, New York has actually come 0:01:45.760 --> 0:01:47.560 out and said this isn't good enough. We're going to 0:01:47.560 --> 0:01:50.520 continue on. So if they continue on with the litigation, 0:01:50.600 --> 0:01:53.760 they will continue to seek a divestit your order from 0:01:53.800 --> 0:01:56.720 the judge for Live Nation to sell Ticketmaster. They see 0:01:56.800 --> 0:01:59.000 that as the only solution to kind of fix a 0:01:59.120 --> 0:02:03.680 broken concert ticketing system and live concert industry. I'll tell you, 0:02:03.720 --> 0:02:05.760 I think it's a long shot. You know, once you 0:02:05.760 --> 0:02:07.760 get this settlement with the Department of Justice and you 0:02:07.840 --> 0:02:10.640 kind of get the lose the weight of the Department 0:02:10.680 --> 0:02:13.040 of Justice behind you on these anti trust matters. It 0:02:13.120 --> 0:02:15.639 is difficult for the States to go forward and win, 0:02:16.080 --> 0:02:19.079 even if they won a jury determination that Live Nation 0:02:19.240 --> 0:02:22.040 was guilty of a legal monopolization. I'm not so sure 0:02:22.080 --> 0:02:24.200 that the judge would be willing to stick his neck 0:02:24.240 --> 0:02:27.800 out and impose what's considered a really drastic remedy generally 0:02:28.240 --> 0:02:29.920 to force a company to break itself up. 0:02:30.040 --> 0:02:32.760 So let's play pretend and say the States are not 0:02:32.880 --> 0:02:37.600 successful with their trials. Does this DOJ settlement mean anything 0:02:37.639 --> 0:02:39.639 at all to you and me when we go out 0:02:39.680 --> 0:02:41.600 to try to buy tickets. I mean, and I've said 0:02:41.600 --> 0:02:43.480 this people who listen to the show regularly. No, I 0:02:43.480 --> 0:02:46.480 talk about being a family of five, and man, if 0:02:46.639 --> 0:02:48.359 you had taken a small mortgage, this just like take 0:02:48.360 --> 0:02:50.560 the whole Saley to go see a show. So is 0:02:50.600 --> 0:02:53.200 that going to get any better under this settlement as 0:02:53.200 --> 0:02:53.680 it stands. 0:02:53.760 --> 0:02:56.880 I'll tell you that I'm skeptical. And you know what 0:02:56.919 --> 0:02:59.600 you just said is why this case is so politically popular. 0:02:59.639 --> 0:03:02.120 And this was a little bit surprising because it really 0:03:02.160 --> 0:03:07.440 has bipartisan interest. It has bipartisan support, you know, consumer support. 0:03:07.760 --> 0:03:09.480 Kid Rock was going to come along and he was 0:03:09.520 --> 0:03:11.640 going to be a witness for the plaintiffs in this 0:03:11.720 --> 0:03:15.560 case because Live Nation has been under a Department of 0:03:15.639 --> 0:03:18.800 Justice consent order since twenty ten, So, in other words, 0:03:18.840 --> 0:03:21.800 since twenty ten, the way they behave in the marketplace 0:03:21.919 --> 0:03:24.840 was supposed to be regulated. They were supposed to behave 0:03:24.880 --> 0:03:27.000 in a certain way, and they've managed to really get 0:03:27.040 --> 0:03:30.880 around that for years. In fact, during the first Trump administration, 0:03:30.960 --> 0:03:34.400 the Department of Justice investigated, determined that Live Nation was 0:03:34.520 --> 0:03:36.920 violating the terms of that order, and extended it and 0:03:36.960 --> 0:03:39.920 sort of bolstered its terms. And now this case came 0:03:39.960 --> 0:03:43.680 along with the allegation that no Live Nation continues to 0:03:43.800 --> 0:03:46.920 violate the terms of that order. And so my skepticism 0:03:46.960 --> 0:03:50.440 comes from, there are new terms here that they're talking about. 0:03:50.560 --> 0:03:53.160 That again, our behavioral I talked about selling the amps, 0:03:53.160 --> 0:03:55.800 but there are also behavioral conditions, and if Live Nation 0:03:55.880 --> 0:03:58.600 has been able to get around behavioral conditions since twenty ten, 0:03:58.800 --> 0:04:00.360 I'm not sure what's going to stop now. 0:04:01.320 --> 0:04:04.680 What about Ticketmaster's competitors. Have they done things better? Have 0:04:04.760 --> 0:04:07.440 they changed a way that they sell tickets or that 0:04:07.560 --> 0:04:09.720 they allow people to buy and sell tickets. 0:04:09.840 --> 0:04:12.520 What's interesting you ask, because the CEO and founder of 0:04:12.600 --> 0:04:15.080 seat Geek was one of the witnesses I heard last week, 0:04:15.320 --> 0:04:17.920 and seat geek started as a secondary ticket seller. They 0:04:17.920 --> 0:04:20.440 were just a marketplace to bring together people who wanted 0:04:20.440 --> 0:04:22.880 to sell tickets they couldn't use and buyers. But they're 0:04:22.920 --> 0:04:25.360 trying to get into what's called primary ticketing, being the 0:04:25.400 --> 0:04:28.280 first one to ticket an event, and really have struggled. 0:04:28.440 --> 0:04:30.760 And they say they have struggled because of Live Nation, 0:04:31.120 --> 0:04:34.400 that they have superior technology, that their platform is better, 0:04:34.600 --> 0:04:36.680 that what they can offer venues is better, but they 0:04:36.720 --> 0:04:39.520 haven't been able to get those venues signed up because 0:04:39.560 --> 0:04:41.919 either they have a long term exclusive agreement to be 0:04:41.960 --> 0:04:45.520 ticketed by Ticketmaster, or because Live Nation, which is a 0:04:45.600 --> 0:04:49.080 huge promoter handles artists tours, said we'll route our artists 0:04:49.120 --> 0:04:51.359 around your venue. We won't bring them to your venue 0:04:51.440 --> 0:04:53.680 if you use some company other than Ticketmaster. 0:04:54.200 --> 0:04:57.080 Stay with us. More from Bloomberg Intelligence coming up after this. 0:05:00.760 --> 0:05:04.440 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:05:04.520 --> 0:05:07.880 weekdays at ten am Eastern on Applecarcklay and Android Auto 0:05:08.000 --> 0:05:11.080 with the Bloomberg Business app. Listen on demand wherever you 0:05:11.120 --> 0:05:14.560 get your podcasts, or watch us live on YouTube. 0:05:15.080 --> 0:05:18.320 Just a few days ago, Novo Nordisk was suing Hymns 0:05:18.400 --> 0:05:22.320 and Hers because they were selling a cheaper knockoff brand 0:05:22.360 --> 0:05:26.039 of their best selling WGOVI blockbuster obesity drub. Well, you 0:05:26.040 --> 0:05:29.440 know what, now they're in business once again with Hymns 0:05:29.480 --> 0:05:31.320 and Hers here to break it down. As Madison Muller 0:05:31.320 --> 0:05:34.680 Bloomberg News health reporter boy shares of Hymns and Hers 0:05:35.080 --> 0:05:37.120 up now, I think better than thirty percent. So Wall 0:05:37.120 --> 0:05:39.960 Street obviously likes this situation. How are these two companies 0:05:39.960 --> 0:05:40.560 working together? 0:05:40.920 --> 0:05:43.920 Yeah, it's a little bit of a crazy, surprising situation 0:05:44.120 --> 0:05:47.400 that ends a month's long saga between the two companies. 0:05:48.080 --> 0:05:50.839 They are now pairing up for the second time to 0:05:50.920 --> 0:05:54.120 allow Novo to sell discounted versions of its weight loss 0:05:54.200 --> 0:05:57.880 drugs on Hymns and Hers telehealth platform. And people might 0:05:57.920 --> 0:06:00.720 recall that this actually was the case back in June. 0:06:00.800 --> 0:06:03.400 The two companies were working together to do something similar 0:06:03.400 --> 0:06:07.760 and that sort of fell apart spectacularly when Novo accused 0:06:07.800 --> 0:06:12.320 Hims of deceptive marketing of these copycat weight loss medications 0:06:12.320 --> 0:06:15.320 that it was continuing to sell on its platform, and 0:06:15.320 --> 0:06:18.400 that really sent him shares down at the time. But 0:06:18.480 --> 0:06:21.479 the two companies since then have traded various barbs I 0:06:21.520 --> 0:06:26.120 mean with Novo suing HIMS over selling a copycat version 0:06:26.160 --> 0:06:29.600 of its blockbuster weight loss pill that recently launched, And 0:06:29.680 --> 0:06:32.320 so this is definitely a surprise too. I think a 0:06:32.320 --> 0:06:34.720 lot of investors out there who had expected this to 0:06:34.839 --> 0:06:36.839 continue dragging on between the two companies. 0:06:37.080 --> 0:06:40.719 So is this what's really driving this strategic partnership though? 0:06:40.880 --> 0:06:44.360 Is it eHealth these eHealth providers and if so, sort 0:06:44.360 --> 0:06:45.920 of connect those dots for us. 0:06:46.040 --> 0:06:48.880 Yeah, exactly. I mean, I think on both sides, both 0:06:48.920 --> 0:06:53.960 companies are under enormous pressure right now. HYMNS mounting regulatory 0:06:54.000 --> 0:06:57.080 and legal pressure, both with the Nova Noordist lawsuit that 0:06:57.160 --> 0:07:00.200 now has been pulled, but also with the FDA saying 0:07:00.240 --> 0:07:02.200 that it was going to crack down on compounded weight 0:07:02.240 --> 0:07:06.320 loss drugs. There's a possible DOJ investigation, and they also 0:07:06.360 --> 0:07:08.400 disclosed during earnings a couple of weeks ago that they're 0:07:08.640 --> 0:07:12.080 under investigation by the SEC. So they have a lot 0:07:12.160 --> 0:07:15.560 going on themselves and really need a path forward, even 0:07:15.640 --> 0:07:18.840 though they have other offerings on their platform. Investors really 0:07:18.920 --> 0:07:21.640 have said that they don't see another similar avenue of 0:07:21.720 --> 0:07:24.760 growth like weight loss drugs. Then on the Novo Nordisk side, 0:07:24.840 --> 0:07:27.600 Novo has really been losing market share to companies like 0:07:27.680 --> 0:07:30.560 Hymns that sell these knockoff weight loss drugs, as well 0:07:30.600 --> 0:07:34.119 as Eli Lilly, which is a massive pharmaceutical company based 0:07:34.120 --> 0:07:36.560 here in the US, and they have rival weight loss 0:07:36.600 --> 0:07:39.360 drugs that have become more popular than Novo's. So there's 0:07:39.400 --> 0:07:42.360 a lot of pressure for both companies on both sides. 0:07:42.440 --> 0:07:45.560 These ehalth platforms, like you said, have been an enormous 0:07:45.640 --> 0:07:49.080 driver of growth for Lily and for Novo. A lot 0:07:49.080 --> 0:07:51.920 of patients are seeking out these medications on these online 0:07:51.920 --> 0:07:54.800 platforms where it's often easier and can be cheaper to 0:07:54.840 --> 0:07:58.600 get these medications, and so partnering both companies have been 0:07:58.600 --> 0:08:01.760 looking to partner with a lot of these eHealth companies, 0:08:02.400 --> 0:08:04.720 from Row to weight Watchers to Hymns and Hers. 0:08:04.840 --> 0:08:07.200 Right, what is Hymns and her sort of bread and 0:08:07.240 --> 0:08:08.239 butter if you will? 0:08:08.640 --> 0:08:10.080 Yeah, I mean for a long time it was a 0:08:10.080 --> 0:08:13.080 rectile dysfunction and hair loss drugs, okay, And so they 0:08:13.080 --> 0:08:16.600 really went after this you know, consumer market, consumer drugs 0:08:16.840 --> 0:08:19.240 that are popular and that maybe patients didn't you know, 0:08:19.320 --> 0:08:21.720 were embarrassed for whatever reason to go into their doctor 0:08:21.760 --> 0:08:24.760 and ask for these medications. They wanted a more discreete 0:08:24.880 --> 0:08:28.040 online sort of service where they can get them. But 0:08:28.080 --> 0:08:30.360 then when they moved into weight loss drugs I think 0:08:30.440 --> 0:08:33.600 two years ago now at this point, that really became 0:08:33.840 --> 0:08:36.120 what put them on the map for a lot of people. 0:08:36.200 --> 0:08:38.200 I mean I still talk to people who weren't really 0:08:38.200 --> 0:08:40.520 paying attention to what Hymns was doing until they started 0:08:40.559 --> 0:08:43.120 selling weight loss drugs, and that was a massive boon 0:08:43.200 --> 0:08:46.360 for them over the last couple of years and really 0:08:46.559 --> 0:08:49.640 a major growth driver. And then when that sort of 0:08:49.800 --> 0:08:52.680 ended that it became a question mark of sort of 0:08:52.679 --> 0:08:54.600 what was going to be that next avenue of growth 0:08:54.600 --> 0:08:54.960 for them. 0:08:55.600 --> 0:08:58.600 So Nogo has a new CEO, right, Mike is it 0:08:58.720 --> 0:09:03.560 Dukeston Star? He was personally involved in these negotiations with 0:09:03.640 --> 0:09:05.360 Hymns and hers. What does that sort of tell you 0:09:05.400 --> 0:09:08.400 about this new CEO? I guess a much more hands 0:09:08.400 --> 0:09:09.960 on approach than some others might have. 0:09:10.240 --> 0:09:13.840 Yeah, definitely. And the last sort of talks and issues 0:09:14.000 --> 0:09:17.199 really fell apart under Novo's last CEO, So Mike was 0:09:17.240 --> 0:09:21.000 kind of looking to bring things back and really, from 0:09:21.000 --> 0:09:24.520 what we understand, like shepherded this renewed partnership between the 0:09:24.520 --> 0:09:27.000 two companies. He was very involved him and the HYMN 0:09:27.080 --> 0:09:32.520 CEO Andrew Dudam spoke directly worked directly on reigniting this 0:09:32.600 --> 0:09:35.880 partnership between the two companies. You know, Mike has taken 0:09:35.920 --> 0:09:39.840 a more aggressive approach than Novo has historically Novo's CEOs 0:09:39.880 --> 0:09:42.640 have historically because they've really lost out in the US 0:09:42.760 --> 0:09:44.920 market that they have helped create, and that is the 0:09:44.920 --> 0:09:49.120 most lucrative weight loss drug market, and he's looking for 0:09:49.160 --> 0:09:52.000 aggressive actions to get them back in the game, everything 0:09:52.040 --> 0:09:54.080 from M and A to sort of the approach that 0:09:54.120 --> 0:09:58.280 they're taking with these compounding pharmacies and with these eHealth companies. 0:09:58.600 --> 0:10:00.840 And one of the things he has told us that 0:10:00.920 --> 0:10:03.800 when he took this job several months ago, one of 0:10:03.840 --> 0:10:06.000 the feedbacks he got from a lot of investors and 0:10:06.000 --> 0:10:09.560 analysts was that Nova wasn't making the most of this 0:10:09.880 --> 0:10:13.040 you know, consumer health e health market like in the 0:10:13.040 --> 0:10:15.079 same way that Lily was, and that was somewhere where 0:10:15.120 --> 0:10:17.840 they could really improve things. So he's said that that's 0:10:17.880 --> 0:10:20.400 been a major push for them, even with sort of 0:10:21.080 --> 0:10:24.600 refreshing their own consumer health websites and the way that 0:10:24.640 --> 0:10:28.000 everything looks, just making it a better experience for consumer's patients. 0:10:28.600 --> 0:10:30.880 And so that sort of fits in with this same 0:10:30.960 --> 0:10:32.040 strategy with hims. 0:10:33.080 --> 0:10:35.920 Stay with us. More from Bloomberg Intelligence coming up after this. 0:10:39.320 --> 0:10:43.000 You're listening to the Bloomberg Intelligence podcast. Catch us Live 0:10:43.080 --> 0:10:44.120 weekdays at ten am. 0:10:44.200 --> 0:10:44.880 He's done on. 0:10:44.880 --> 0:10:48.120 Apple, Cocklay and Android Auto with the Bloomberg Business app. 0:10:48.200 --> 0:10:51.480 Listen on demand wherever you get your podcasts, or watch 0:10:51.520 --> 0:10:53.080 us live on YouTube. 0:10:53.600 --> 0:10:56.280 We want to talk a little bit about some individual sectors, 0:10:56.280 --> 0:10:59.080 and here I'm really talking about consumer and high end. 0:10:58.920 --> 0:11:00.000 Consumer, luxury consumer. 0:11:01.200 --> 0:11:04.880 They are obviously impacted by how people feel when it 0:11:04.920 --> 0:11:07.920 comes to the conflict in the Middle East and how 0:11:08.240 --> 0:11:11.120 comfortable people feel about spending in this current environment. 0:11:11.240 --> 0:11:13.520 There's a lot of uncertainty out there. What does that. 0:11:13.520 --> 0:11:17.600 Mean for companies like LVMH what does it mean for 0:11:19.280 --> 0:11:22.960 the companies behind Cardier. Deborah Aiken is the luxury goods 0:11:22.960 --> 0:11:25.760 analysts here a Bloomberg Intelligence and joins us now from London, 0:11:25.840 --> 0:11:29.000 and Deborah, you've crunched the numbers and you say that 0:11:29.040 --> 0:11:33.160 this Middle East war will have a quantifiable impact on 0:11:33.679 --> 0:11:36.280 the luxury goods space, at least what was expected for 0:11:36.360 --> 0:11:37.200 twenty twenty six. 0:11:39.080 --> 0:11:44.480 That's right, yes, So we went through some estimates and 0:11:44.600 --> 0:11:48.240 some data from third party sources. We started with Alta 0:11:48.280 --> 0:11:52.800 Gamma who having spoken to around nineteen sul side analysts, 0:11:52.840 --> 0:11:55.679 it'd looked at twenty twenty six and we saw that 0:11:55.720 --> 0:11:58.560 the highest growth was set to come from Middle East 0:11:58.600 --> 0:12:01.920 at around six percent, of which four and a half 0:12:02.000 --> 0:12:06.600 percent from locals and one and a half percent from tourists. 0:12:07.040 --> 0:12:08.959 And that was the fastest growth in the sector in 0:12:09.000 --> 0:12:11.960 a sector which we expected for twenty six grow to 0:12:12.120 --> 0:12:15.560 forty five percent. So we then start to say, okay, 0:12:15.679 --> 0:12:20.040 what happens if we see demand coming off in the 0:12:20.040 --> 0:12:23.720 Middle East locally at around ten percent, and that gave 0:12:23.800 --> 0:12:27.240 us about a fifty big stent for every ten percent 0:12:27.280 --> 0:12:29.320 that was coming off, And given that we get a 0:12:29.360 --> 0:12:32.800 lot of that high wealth traveling abroad also to spend, 0:12:32.880 --> 0:12:36.880 we felt they could quite quickly across the year and 0:12:36.920 --> 0:12:40.839 dependent on what would happen around the area, with around 0:12:40.920 --> 0:12:43.480 one and a half percent shaped off that four percent 0:12:43.559 --> 0:12:45.239 overall for the global industry. 0:12:46.080 --> 0:12:50.280 Deb of the luxury names, the luxury retailers globally, is 0:12:50.320 --> 0:12:56.680 anyone particularly better positioned to sort of weather the storm. 0:12:56.960 --> 0:12:59.920 I think we need to think about the biggest global 0:13:00.080 --> 0:13:04.959 makers and the most high end so we know companies 0:13:05.080 --> 0:13:09.440 like air Mares and Brunellocutionelli are running and expecting high 0:13:09.520 --> 0:13:12.760 single digital load double digit growth in twenty twenty six. 0:13:13.360 --> 0:13:16.400 Much of that comes from parts of Asia at the 0:13:16.480 --> 0:13:19.720 high end, very much from the US, part of Europe 0:13:19.800 --> 0:13:22.000 and the Middle East, so there's a very good mix there. 0:13:22.440 --> 0:13:25.920 And then also we could look at names like Richemond 0:13:26.000 --> 0:13:29.959 for example, where Cartier is being growing very strongly. And 0:13:30.040 --> 0:13:33.400 Richemon incidentally is one of only two who give away 0:13:33.440 --> 0:13:37.320 their breakdown in Middle Eastern Africa. They have nine percent 0:13:37.360 --> 0:13:40.400 of sales from maa region prior to being the other 0:13:40.440 --> 0:13:42.600 with around four percent, which is where it is on 0:13:42.760 --> 0:13:47.120 average for the industry overall for Middle East Africa. But 0:13:47.280 --> 0:13:51.160 overall we would expect Rolexas and others to do very 0:13:51.160 --> 0:13:54.280 well with wait to lists, so high end jewelry and 0:13:54.360 --> 0:13:59.520 some of the high end leather goods or apparel makers 0:13:59.559 --> 0:14:02.959 we would would do very well. It's quite interesting that 0:14:03.040 --> 0:14:08.280 into this geopolitical unrest for Q four there were some 0:14:08.400 --> 0:14:11.560 big names coming through with high single digital or double 0:14:11.600 --> 0:14:14.160 digit growth from the Middle East. So if things do 0:14:14.280 --> 0:14:16.480 continue for a long time, it does knock some of 0:14:16.480 --> 0:14:17.280 the growth away. 0:14:18.080 --> 0:14:22.000 You mentioned jewelry and you mentioned leather goods. What about spirits? 0:14:22.120 --> 0:14:25.520 How is that different when it comes to the breakdown 0:14:25.560 --> 0:14:27.960 the categories within luxury. 0:14:28.640 --> 0:14:32.000 So the only spirit maker that I closely follows my 0:14:32.200 --> 0:14:35.720 one of my colleagues covers the high end spirits. But 0:14:35.840 --> 0:14:39.200 I would be looking at what would happen within LVMH group. 0:14:40.280 --> 0:14:45.560 Their biggest exposures were out of Asia and the US 0:14:46.080 --> 0:14:48.920 and where they were doing very well again in Champagnes, 0:14:49.040 --> 0:14:53.600 doing better in wines, but spirits, particularly cognacs were difficult 0:14:53.640 --> 0:14:56.480 again for twenty twenty six. So the growth outlook there 0:14:56.560 --> 0:14:57.480 wasn't very strong. 0:14:57.760 --> 0:15:00.640 Stay with us. More from Bloomberg Intelligence coming up after this. 0:15:04.240 --> 0:15:07.920 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:15:08.000 --> 0:15:10.720 weekdays at ten am. He's done on Apple, Cocklay and 0:15:10.720 --> 0:15:14.000 Android Auto with the Bloomberg Business App. Listen on demand 0:15:14.040 --> 0:15:17.120 wherever you get your podcasts, or watch us live on 0:15:17.160 --> 0:15:18.720 YouTube with. 0:15:19.640 --> 0:15:23.280 Long term bonials as they go, So go mortgage rates 0:15:23.400 --> 0:15:24.960 and so I want to bring in our next guest. 0:15:25.000 --> 0:15:28.280 She is Best Friedman, CEO at Brown Harris Stevens, to 0:15:28.360 --> 0:15:31.080 join us to talk about what's happening in the residential 0:15:31.120 --> 0:15:34.000 housing market and Best, I guess the best way I 0:15:34.040 --> 0:15:36.040 want to start things off is to kind of take 0:15:36.080 --> 0:15:39.800 a big step back and consider just how much international 0:15:39.840 --> 0:15:40.920 conflicts tend. 0:15:40.720 --> 0:15:42.520 To affect the housing market. 0:15:42.600 --> 0:15:45.360 Yes, we know they lead to hire bond yields and 0:15:45.840 --> 0:15:48.160 or they can lead to higher boniolds in this case, 0:15:48.560 --> 0:15:51.160 which could increase mortgage rates. But what does it mean 0:15:51.200 --> 0:15:54.560 in terms of demand overall for housing in the US? 0:15:55.640 --> 0:15:58.160 Well, good morning, thank you for having me this morning. 0:15:59.280 --> 0:16:02.480 You know, I think it's just more volatility and uncertainty, 0:16:02.680 --> 0:16:05.480 and I think, you know, we've already had sort of 0:16:05.520 --> 0:16:08.600 a bit of a frozen housing market and some challenges 0:16:08.640 --> 0:16:12.920 with affordability, and this just creates a little bit more 0:16:13.640 --> 0:16:16.920 sort of concern for buyers who've been on the sidelines 0:16:16.960 --> 0:16:20.000 a bit, and so they may hold off. Even though 0:16:20.000 --> 0:16:22.640 we saw rates go down there lower than they were 0:16:22.720 --> 0:16:24.960 the thirty year from a year ago, which is good. 0:16:25.560 --> 0:16:29.440 But this war is not really great for markets because 0:16:29.600 --> 0:16:31.680 you know, people don't know what's going to be and 0:16:31.720 --> 0:16:35.320 so it's it's hard to say what the impact will be. 0:16:36.600 --> 0:16:38.800 But you know, I think it's going to be slow 0:16:38.800 --> 0:16:42.160 and steady, and people are watching, and you know, when 0:16:42.200 --> 0:16:45.800 buyers need to buy and can buy, they do, Uh, 0:16:46.240 --> 0:16:49.600 and in this environment, it's sort of wait and see 0:16:49.600 --> 0:16:50.160 a little bit. 0:16:50.840 --> 0:16:53.600 Is cash still king in the home buying market right now? 0:16:53.640 --> 0:16:55.720 Because we knew for a long time there was this 0:16:55.840 --> 0:16:58.480 trend of people who had the cash were using it. 0:16:58.480 --> 0:17:00.120 It was really hard for other people to go up 0:17:00.120 --> 0:17:02.680 against them and win in these bidding wars. Is that 0:17:02.760 --> 0:17:05.239 still the case or is that starting to you know, 0:17:05.320 --> 0:17:06.360 pull back a little. 0:17:06.160 --> 0:17:09.040 Bit, you know, I'm still seeing the cash is king. 0:17:09.240 --> 0:17:11.879 Last year we saw you know, especially in places like 0:17:11.960 --> 0:17:15.560 New York City where you have discretionary markets, you know, 0:17:15.560 --> 0:17:18.240 where people are buying their second or third home, you know, 0:17:18.440 --> 0:17:21.600 cash is king. And we saw more than half the 0:17:21.640 --> 0:17:24.360 deals last year in New York City were done in cash. 0:17:24.680 --> 0:17:26.960 And so yeah, I think that goes a long way, 0:17:27.040 --> 0:17:29.959 especially because money is more expensive. So if people have 0:17:30.040 --> 0:17:33.760 the cash, they're using it to buy their homes. So 0:17:34.119 --> 0:17:36.600 I haven't seen that mitigate at all. I see. I 0:17:36.600 --> 0:17:40.320 think people who can afford to and have cash are 0:17:40.320 --> 0:17:43.400 going to use it versus getting a mortgage. 0:17:43.880 --> 0:17:45.480 And a lot of the people who have the cash 0:17:45.520 --> 0:17:48.720 tend to be international buyers as well. How present are 0:17:48.760 --> 0:17:50.359 they in this housing market? 0:17:51.440 --> 0:17:54.280 Not seeing a lot of the international buyers as of 0:17:54.440 --> 0:17:57.320 late I see a lot of domestic people moving from 0:17:57.359 --> 0:18:00.239 within states, you know, like New York to Texas, New 0:18:00.320 --> 0:18:03.159 York to Florida. But that sort of thing about I 0:18:03.160 --> 0:18:05.760 don't see a huge international presence. 0:18:06.880 --> 0:18:11.120 When you look at affordability across the map of the US, 0:18:11.440 --> 0:18:14.679 where does the buyer get the most value for their 0:18:14.720 --> 0:18:15.560 money at the moment. 0:18:16.760 --> 0:18:20.199 I mean, that's so it's really hard to say. I mean, 0:18:20.240 --> 0:18:24.560 there's certain pockets and areas, you know, in different places 0:18:24.800 --> 0:18:27.439 of the United States where there are good you know, 0:18:27.560 --> 0:18:32.280 deals where there's ample supply. But you know, there's certain 0:18:32.320 --> 0:18:34.560 parts of New York, even New York City, where there's 0:18:34.600 --> 0:18:38.959 decent supply and people can and negotiate and and and 0:18:39.000 --> 0:18:41.760 really get something that makes sense, where the price per 0:18:41.760 --> 0:18:45.680 square foot is really a good value. Parts of Brooklyn, 0:18:46.560 --> 0:18:50.400 there's parts of upstate New York and Florida. There's different areas. 0:18:50.440 --> 0:18:55.200 It really depends on someone's circumstances and what they can afford. 0:18:56.119 --> 0:18:59.240 But where you see tighter plate supply, like places like 0:18:59.320 --> 0:19:03.920 Palm Beach and Connecticut, that's where buyers are much more challenged. 0:19:03.960 --> 0:19:07.919 But there's certain areas, like you know in California, and 0:19:08.000 --> 0:19:11.200 different areas where there is decent there's a decent amount 0:19:11.240 --> 0:19:14.280 of supply. It just really depends because real estate is 0:19:14.320 --> 0:19:18.679 so local, and it depends on someone's circumstances and what 0:19:18.800 --> 0:19:19.680 they can afford. 0:19:20.680 --> 0:19:20.960 Yeah. 0:19:21.440 --> 0:19:24.680 Absolutely, I mean one one town in one state will 0:19:24.720 --> 0:19:27.800 be completely different from another town in the same state. 0:19:28.359 --> 0:19:31.120 What does inventory look like when it comes to existing 0:19:31.160 --> 0:19:33.240 homes versus newly new construction. 0:19:34.800 --> 0:19:38.320 You know, you guys probably have read this stat that 0:19:38.359 --> 0:19:41.199 we have a shortage of homes in the United States 0:19:41.200 --> 0:19:44.280 of roughly four million, give or take, and we have 0:19:44.359 --> 0:19:46.480 a real you know challenge and that we need to 0:19:46.480 --> 0:19:51.080 get more supply. So you know, builders are you know, 0:19:51.359 --> 0:19:53.920 not as quick to build today as they were, and 0:19:54.000 --> 0:19:57.520 so we're not seeing the same incentives to build. We 0:19:57.600 --> 0:20:01.560 have challenges with zoning, and the people that own homes 0:20:01.720 --> 0:20:04.600 already are taking their time to sell as well because 0:20:04.640 --> 0:20:07.200 they have locked in rates that are lower and therefore 0:20:07.200 --> 0:20:08.879 they don't want to list in sell. So we have 0:20:09.000 --> 0:20:13.880 a challenge in both areas, and so you know, we're 0:20:13.880 --> 0:20:16.040 trying to do things like as you guys are probably 0:20:16.080 --> 0:20:19.760 aware of City of Yes where that was able to 0:20:19.880 --> 0:20:22.919 we're able to get something like eighty thousand new units 0:20:22.920 --> 0:20:26.199 into the housing market. We need more legislation like that 0:20:26.240 --> 0:20:28.600 so that we can get you know, more supplying to 0:20:28.680 --> 0:20:31.760 the market. So new home sales are you know, new 0:20:31.800 --> 0:20:35.639 builder sales are slower, but you know, it's sort of 0:20:35.680 --> 0:20:38.400 a challenge in both arenas, in the resale market and 0:20:38.440 --> 0:20:40.000 in the new home market. 0:20:40.520 --> 0:20:42.199 I'm wondering if it's going to if banks are going 0:20:42.280 --> 0:20:45.600 to get a little stingy when it comes to mortgages 0:20:45.800 --> 0:20:48.119 in the months ahead. And part of that I'm wondering 0:20:48.200 --> 0:20:51.000