1 00:00:01,560 --> 00:00:05,680 Speaker 1: This is Bloomberg Intelligence with Scarletfoo and Paul Sweeney. 2 00:00:05,760 --> 00:00:07,840 Speaker 2: How do you think the FED is looking at tariffs? 3 00:00:08,000 --> 00:00:09,200 Speaker 2: The uncertainty of terriffs. 4 00:00:09,320 --> 00:00:11,240 Speaker 3: Let's take a look at the sectors and how they 5 00:00:11,360 --> 00:00:11,960 Speaker 3: performed a. 6 00:00:11,880 --> 00:00:14,800 Speaker 2: Lot of investors getting whip saled every day by news events. 7 00:00:14,560 --> 00:00:18,280 Speaker 1: Breaking market headlines, and corporate news from across the globe. 8 00:00:18,320 --> 00:00:20,960 Speaker 3: Could we see a market disruption of market events? 9 00:00:21,000 --> 00:00:23,000 Speaker 2: So people just too exuberant out there? 10 00:00:23,160 --> 00:00:25,720 Speaker 3: You see some so called low quality stocks driving this 11 00:00:25,800 --> 00:00:26,560 Speaker 3: short term rally. 12 00:00:26,600 --> 00:00:31,400 Speaker 1: Bloomberg Intelligence with Scarlettfoo and Paul Sweeney on Bloomberg Radio, 13 00:00:31,560 --> 00:00:33,480 Speaker 1: YouTube and Bloomberg Originals. 14 00:00:34,320 --> 00:00:36,959 Speaker 2: On today's Bloomberg Intelligence Show, we dig inside the big 15 00:00:37,000 --> 00:00:39,320 Speaker 2: business stories impacting Wall Street and the global markets. 16 00:00:39,560 --> 00:00:41,920 Speaker 4: Each and every week, we provide in depth research and 17 00:00:42,040 --> 00:00:44,199 Speaker 4: data on some of the two thousand companies and one 18 00:00:44,280 --> 00:00:46,920 Speaker 4: hundred and thirty industries our analysts cover worldwide. 19 00:00:47,040 --> 00:00:49,400 Speaker 2: Today, we'll explain how the global business of sports is 20 00:00:49,440 --> 00:00:51,160 Speaker 2: getting bigger fast. 21 00:00:51,240 --> 00:00:54,200 Speaker 4: Plus a look at the yearly Bloomberg BusinessWeek's ranking of 22 00:00:54,280 --> 00:00:56,320 Speaker 4: the best business schools in the country. 23 00:00:56,440 --> 00:00:59,000 Speaker 2: But first, this week, President Trump pushed for a six 24 00:00:59,080 --> 00:01:02,440 Speaker 2: month reporting schedule for publicly traded US companies. This would 25 00:01:02,480 --> 00:01:05,399 Speaker 2: in the current quarterly format to quote, save money and 26 00:01:05,440 --> 00:01:09,520 Speaker 2: allow managers to focus on properly running their companies for more. 27 00:01:09,560 --> 00:01:12,160 Speaker 4: Scarlet Foo and guest host Isabell Lee were joined by 28 00:01:12,160 --> 00:01:16,320 Speaker 4: Michael Casper, Bloomberg Intelligence US equity strategists. They first asked 29 00:01:16,360 --> 00:01:18,880 Speaker 4: Michael to break down what this would mean for earning season. 30 00:01:19,240 --> 00:01:21,360 Speaker 5: Certainly has been an idea that's been floated for quite 31 00:01:21,360 --> 00:01:25,560 Speaker 5: some time among ESG circles, even if you go back 32 00:01:25,600 --> 00:01:28,360 Speaker 5: to the twenty sixteen election, I believe Hillary was floating 33 00:01:28,360 --> 00:01:32,400 Speaker 5: this idea. But it does have some validity in terms 34 00:01:32,440 --> 00:01:36,200 Speaker 5: of aligning you know, shareholder ideas with long term performance 35 00:01:36,240 --> 00:01:39,119 Speaker 5: and management incentives. Right, if management doesn't have to beat 36 00:01:39,120 --> 00:01:43,639 Speaker 5: a quarterly number every quarter, they can more easily focus 37 00:01:43,680 --> 00:01:45,960 Speaker 5: on the longer term, and that certainly has its merits. 38 00:01:46,000 --> 00:01:48,320 Speaker 5: But again, I don't think chan is the best analog 39 00:01:48,760 --> 00:01:49,360 Speaker 5: to make right. 40 00:01:49,280 --> 00:01:51,680 Speaker 6: There, talk to us about the risks that semi annual 41 00:01:51,760 --> 00:01:54,520 Speaker 6: reporting could post, because why haven't we done it? Obviously, 42 00:01:54,560 --> 00:01:57,520 Speaker 6: I'm sure that our regulators and policymakers have way into 43 00:01:57,520 --> 00:01:58,240 Speaker 6: pros and cons. 44 00:01:58,360 --> 00:02:01,080 Speaker 5: Yeah, so it's a it's less flow of information, right, 45 00:02:01,160 --> 00:02:03,520 Speaker 5: So you think about the quarterly reporting schedule, you're getting 46 00:02:03,520 --> 00:02:06,280 Speaker 5: information every three months. As an investor, you can process 47 00:02:06,320 --> 00:02:09,720 Speaker 5: that information more accurately priced things in the market, And 48 00:02:09,880 --> 00:02:11,919 Speaker 5: with a six month time frame, you lose a little 49 00:02:11,960 --> 00:02:14,640 Speaker 5: bit of that, right, And obviously I think consensus estimates 50 00:02:14,639 --> 00:02:17,920 Speaker 5: will be a little bit less let's say, accurate, because 51 00:02:17,960 --> 00:02:19,919 Speaker 5: they have to forecast a six month time period instead 52 00:02:19,919 --> 00:02:22,239 Speaker 5: of a three month time period. So that there are 53 00:02:22,240 --> 00:02:26,560 Speaker 5: some bumps in the road with adopting this, But again, 54 00:02:26,600 --> 00:02:30,560 Speaker 5: if it can align shareholder value with management centis, maybe 55 00:02:30,680 --> 00:02:32,440 Speaker 5: you do get a benefit out of it. 56 00:02:32,840 --> 00:02:35,960 Speaker 3: Would CEOs necessarily like this, I mean, I'm sure everyone 57 00:02:36,200 --> 00:02:38,960 Speaker 3: wants to save time and save money that that was 58 00:02:39,000 --> 00:02:41,960 Speaker 3: something that the President cited as a benefit of moving 59 00:02:42,040 --> 00:02:44,160 Speaker 3: to six months reporting as opposed to three months, But 60 00:02:44,800 --> 00:02:46,959 Speaker 3: in general, is this something that CEOs would favor. 61 00:02:47,480 --> 00:02:48,800 Speaker 5: I don't know if they would favor it. I think 62 00:02:48,840 --> 00:02:51,160 Speaker 5: they'd be pretty indifferent to it. It's still the same 63 00:02:51,280 --> 00:02:54,080 Speaker 5: scheme of you know, you've got a number every six months, 64 00:02:54,120 --> 00:02:57,200 Speaker 5: you've got to beat that number. It's just more aligning 65 00:02:58,200 --> 00:03:01,519 Speaker 5: that goal with with shareholder value, right, So I don't 66 00:03:01,560 --> 00:03:04,360 Speaker 5: know necessarily if they favor one over the other. They 67 00:03:04,440 --> 00:03:06,239 Speaker 5: might think their life is a little bit easier trying 68 00:03:06,240 --> 00:03:07,600 Speaker 5: to beat on a six month time frame than a 69 00:03:07,639 --> 00:03:09,760 Speaker 5: three month timeframe. But I don't know if it really 70 00:03:10,040 --> 00:03:12,760 Speaker 5: affects cost too much. As the President pointed. 71 00:03:12,520 --> 00:03:15,680 Speaker 6: Out, do you think that under the current SEC regime 72 00:03:15,760 --> 00:03:19,520 Speaker 6: that this would actually be approved because to Scarlett's point earlier, 73 00:03:19,560 --> 00:03:21,360 Speaker 6: and we all know this wasn't the first time this 74 00:03:21,520 --> 00:03:24,760 Speaker 6: was floated, But yeah, maybe it will be approved. 75 00:03:25,000 --> 00:03:27,880 Speaker 5: Maybe, I don't know. There's again, it's been a really 76 00:03:27,960 --> 00:03:31,040 Speaker 5: long push of this and back and forth. Should we 77 00:03:31,080 --> 00:03:33,200 Speaker 5: do six months? Should we do annually? Evens there's some 78 00:03:33,280 --> 00:03:35,880 Speaker 5: countries out there that do annual, and it really hasn't 79 00:03:35,880 --> 00:03:37,680 Speaker 5: gained a lot of traction. I think investors in the 80 00:03:37,760 --> 00:03:40,520 Speaker 5: US are really set on the quarterly reporting schedule. They 81 00:03:40,560 --> 00:03:43,800 Speaker 5: really look for those quarterly numbers to drive their analysis, 82 00:03:44,480 --> 00:03:47,760 Speaker 5: and so it's going to meet a lot of resistance 83 00:03:47,920 --> 00:03:49,160 Speaker 5: amongst the investor. 84 00:03:48,760 --> 00:03:52,240 Speaker 3: Community, I think, yeah, especially as more retail investors are 85 00:03:52,280 --> 00:03:54,680 Speaker 3: now investing in the market too. They want to hear 86 00:03:54,800 --> 00:03:56,840 Speaker 3: from the companies directly, and a lot of those companies 87 00:03:56,880 --> 00:04:00,440 Speaker 3: are tailoring their commentary to this new investor class as well. 88 00:04:00,520 --> 00:04:04,440 Speaker 3: Not so much institutional investors, but the individual investors out there. 89 00:04:04,480 --> 00:04:06,800 Speaker 5: Yeah, certainly you've got this huge flow of zero day 90 00:04:06,840 --> 00:04:10,560 Speaker 5: trading options and everybody trading around earnings events, especially in 91 00:04:10,560 --> 00:04:14,840 Speaker 5: the retail space. That's huge. So maybe amongst the constituency, 92 00:04:14,920 --> 00:04:16,800 Speaker 5: obviously they don't have as much of a lobbying voice 93 00:04:16,800 --> 00:04:20,920 Speaker 5: as you know, your big institutional investors, but amongst his constituency, 94 00:04:21,000 --> 00:04:22,720 Speaker 5: maybe there's a little bit of resistance there as well 95 00:04:22,760 --> 00:04:23,760 Speaker 5: from the retail community. 96 00:04:24,040 --> 00:04:26,479 Speaker 6: Would there be a sector or industry that would benefit 97 00:04:26,640 --> 00:04:29,480 Speaker 6: from a semi annual report, good question. 98 00:04:29,640 --> 00:04:33,360 Speaker 5: Oh yeah, I don't know necessarily, if I could pick 99 00:04:33,360 --> 00:04:36,839 Speaker 5: a sector that would benefit the most. I think tech 100 00:04:36,920 --> 00:04:40,400 Speaker 5: obviously has gained the most from the quarterly reporting schedule. 101 00:04:40,480 --> 00:04:40,640 Speaker 7: Right. 102 00:04:40,680 --> 00:04:43,280 Speaker 5: They've done a really good job of managing their earnings 103 00:04:43,320 --> 00:04:46,680 Speaker 5: and consistently beating and you know, we've seen it time 104 00:04:46,720 --> 00:04:49,560 Speaker 5: and time again. IBM was the bastion of this back 105 00:04:49,560 --> 00:04:52,520 Speaker 5: in the nineties and early two thousands financial engineering to 106 00:04:52,520 --> 00:04:54,840 Speaker 5: beat the quarterly number. It's since, I would argue it's 107 00:04:54,880 --> 00:04:57,040 Speaker 5: been Apple and Microsoft have been very good at it. 108 00:04:57,120 --> 00:04:59,360 Speaker 5: So I think Tech's been the biggest beneficiary, So maybe 109 00:04:59,480 --> 00:05:00,120 Speaker 5: the biggest. 110 00:05:00,360 --> 00:05:03,880 Speaker 2: Our Thanks to Michael Casper Bloomberg Intelligence US equity strategist and. 111 00:05:03,800 --> 00:05:06,240 Speaker 4: Speaking of earnings, Paul, we got results from Cracker Barrel 112 00:05:06,279 --> 00:05:06,679 Speaker 4: this week. 113 00:05:06,720 --> 00:05:10,159 Speaker 2: The company offered sales guidance that missed expectation, showing the 114 00:05:10,200 --> 00:05:13,280 Speaker 2: brand is still dealing with a fallout from its controversial 115 00:05:13,400 --> 00:05:14,920 Speaker 2: and short lived logo change. 116 00:05:15,160 --> 00:05:18,240 Speaker 4: For details, we caught up with BI restaurant analyst Michael Halen. 117 00:05:18,480 --> 00:05:21,240 Speaker 8: They were recorded a great quarter. You know, Same Star 118 00:05:21,360 --> 00:05:24,000 Speaker 8: sales were up five point four percent in the restaurants, 119 00:05:24,040 --> 00:05:27,320 Speaker 8: a couple hundred basis points ahead of the street. But 120 00:05:27,680 --> 00:05:33,359 Speaker 8: sales have decelerated pretty significantly here, you know, since August 121 00:05:33,600 --> 00:05:37,120 Speaker 8: in the logo controversy. So you know, thought Julie Messino 122 00:05:37,200 --> 00:05:40,120 Speaker 8: did a great job. I think she's running a steady 123 00:05:40,120 --> 00:05:43,960 Speaker 8: ship right now. And you know, they're focusing on the 124 00:05:44,040 --> 00:05:46,520 Speaker 8: things that they've been focused on from the beginning, which 125 00:05:46,560 --> 00:05:50,960 Speaker 8: is providing better service and higher quality food at a 126 00:05:51,000 --> 00:05:54,840 Speaker 8: good price point. I would say it seems like they 127 00:05:54,880 --> 00:05:59,240 Speaker 8: may have sandbag guidance as well. They basically are extrapolating 128 00:05:59,400 --> 00:06:02,640 Speaker 8: current track grafic trends throughout the rest of the quarter. 129 00:06:04,080 --> 00:06:07,120 Speaker 8: You know, when second measure data that that Bloomberg owns 130 00:06:07,160 --> 00:06:10,640 Speaker 8: that that we follow is showing that traffic may be 131 00:06:10,720 --> 00:06:14,440 Speaker 8: stabilizing here. So I guess, I guess we'll see. 132 00:06:14,720 --> 00:06:17,360 Speaker 2: All right, let's move on to what's going on with 133 00:06:17,360 --> 00:06:18,200 Speaker 2: our friends that darted. 134 00:06:18,680 --> 00:06:21,560 Speaker 8: Yeah, you know Darden. It was an interesting quarter. Sales 135 00:06:21,600 --> 00:06:28,960 Speaker 8: were fantastic, but slightly below you know, very high expectations, 136 00:06:29,400 --> 00:06:31,480 Speaker 8: and the most interesting part of their report was that 137 00:06:31,520 --> 00:06:36,679 Speaker 8: their margins contracted, largely due to beef costs and Uber 138 00:06:36,760 --> 00:06:41,279 Speaker 8: fees because they did this one million free delivery promotions 139 00:06:41,320 --> 00:06:44,919 Speaker 8: supported by you know, Uber eats marketing dollars, right, and 140 00:06:44,960 --> 00:06:47,600 Speaker 8: so it actually made up five percent of sales, and 141 00:06:47,600 --> 00:06:52,200 Speaker 8: that's very impressive for something that's been instituted, you. 142 00:06:52,160 --> 00:06:53,240 Speaker 9: Know, within a year. 143 00:06:53,440 --> 00:06:57,920 Speaker 8: So, yeah, the margins, you know this, this company has 144 00:06:58,000 --> 00:07:01,279 Speaker 8: best in class margins. They've always protected their margins and 145 00:07:01,360 --> 00:07:04,159 Speaker 8: so seeing a same store sales gain that, you know, 146 00:07:04,200 --> 00:07:07,680 Speaker 8: a very strong same star sales gain without the margin expansion, 147 00:07:08,120 --> 00:07:10,400 Speaker 8: I think shocked some investors. 148 00:07:10,600 --> 00:07:13,160 Speaker 4: So what are they planning to do to widen those margins? 149 00:07:13,360 --> 00:07:16,480 Speaker 4: I heard the portions might not be as big? Are 150 00:07:16,520 --> 00:07:19,720 Speaker 4: they looking at possibly raising prices on the menu. 151 00:07:20,520 --> 00:07:24,680 Speaker 8: Well, they're going to raise prices, but not too aggressively. 152 00:07:24,800 --> 00:07:28,880 Speaker 8: So they're very careful about increasing their prices. A big 153 00:07:28,920 --> 00:07:32,040 Speaker 8: reason why we think they're outperforming is that they've increased 154 00:07:32,040 --> 00:07:36,480 Speaker 8: their prices a lot less than competitors since the pandemic, right, 155 00:07:36,520 --> 00:07:39,560 Speaker 8: and so they don't want to lose that advantage. So 156 00:07:39,680 --> 00:07:42,320 Speaker 8: they are going to raise prices this year, but it's 157 00:07:42,360 --> 00:07:46,360 Speaker 8: going to be modest and less than peers. You know, 158 00:07:46,440 --> 00:07:51,160 Speaker 8: you mentioned the smaller entrees. That's really a move to 159 00:07:51,240 --> 00:07:54,520 Speaker 8: boost traffic. So what they're doing is they're taking seven 160 00:07:54,560 --> 00:07:59,000 Speaker 8: of their popular entrees. They're making an additional, lighter menu 161 00:07:59,080 --> 00:08:02,680 Speaker 8: with those seven items. They're shrinking the portion and they're 162 00:08:02,680 --> 00:08:05,680 Speaker 8: lowering the price, and they're hoping that actually brings in 163 00:08:05,800 --> 00:08:09,800 Speaker 8: greater traffic with low income consumers. So shrinking the size 164 00:08:09,800 --> 00:08:13,200 Speaker 8: of the entrees isn't isn't a major plan in terms 165 00:08:13,240 --> 00:08:16,160 Speaker 8: of saving the margins. With the margins, it's going to 166 00:08:16,240 --> 00:08:21,160 Speaker 8: be you know, executing rights. That's what they're known for, 167 00:08:21,400 --> 00:08:25,680 Speaker 8: you know, consistently becoming more productive in their restaurants. That's 168 00:08:25,680 --> 00:08:27,360 Speaker 8: how they're going to try to fund this. You know, 169 00:08:27,520 --> 00:08:30,520 Speaker 8: there will be some slight price increases, and they mentioned 170 00:08:30,520 --> 00:08:33,720 Speaker 8: they could be a little bit more aggressive. If you know, 171 00:08:33,760 --> 00:08:35,880 Speaker 8: the higher beef prices remain stubborn. 172 00:08:36,160 --> 00:08:37,480 Speaker 2: Thanks to bi's Michael Halen. 173 00:08:38,080 --> 00:08:40,319 Speaker 4: We also got earnings from General Mills this week. 174 00:08:40,559 --> 00:08:43,080 Speaker 2: The maker of curios reported a solid quarter but was 175 00:08:43,120 --> 00:08:44,600 Speaker 2: cautious about the road ahead. 176 00:08:44,840 --> 00:08:48,160 Speaker 4: We spoke with b I Consumer Stables analyst Diana rosso Penya. 177 00:08:48,320 --> 00:08:53,560 Speaker 10: They were mainly in line with expectations. It wasn't that 178 00:08:53,720 --> 00:08:57,640 Speaker 10: much of a surprise, but still, you know, the stock 179 00:08:57,800 --> 00:09:01,160 Speaker 10: is a little bit on the south side. People expected 180 00:09:01,200 --> 00:09:03,600 Speaker 10: better news than what they disclosed. 181 00:09:03,760 --> 00:09:07,160 Speaker 4: Yeah, I mean North America sales came under pressure. What 182 00:09:07,320 --> 00:09:08,200 Speaker 4: was the drag there? 183 00:09:08,720 --> 00:09:13,440 Speaker 10: It was mainly on volume. We expected volume declines but 184 00:09:13,559 --> 00:09:16,520 Speaker 10: not to the magnitude that they did. It was down 185 00:09:16,600 --> 00:09:21,600 Speaker 10: four percent on organic on the organic part, so obviously 186 00:09:21,640 --> 00:09:26,080 Speaker 10: consumers are still trading down. They are mentioning that, you know, 187 00:09:26,160 --> 00:09:31,360 Speaker 10: about eight brands of theirs. It was positive, but it's 188 00:09:31,360 --> 00:09:34,640 Speaker 10: still it wasn't enough for the whole segment two to 189 00:09:34,720 --> 00:09:35,240 Speaker 10: pull through. 190 00:09:35,360 --> 00:09:37,240 Speaker 2: What are they doing or what are they saying about 191 00:09:37,280 --> 00:09:40,599 Speaker 2: tariffs and the impact on their costs versus maybe what 192 00:09:40,640 --> 00:09:43,280 Speaker 2: they're trying to pass along to customers. 193 00:09:42,960 --> 00:09:46,920 Speaker 10: So they are upsetting some of the costs with cost savings. 194 00:09:47,080 --> 00:09:50,080 Speaker 10: It's usually going to be They expected to be about 195 00:09:50,080 --> 00:09:53,240 Speaker 10: one to two percent of cogs this year, which is 196 00:09:53,280 --> 00:09:57,120 Speaker 10: a little bit lower than for example, Campbell's expected they 197 00:09:57,160 --> 00:09:58,559 Speaker 10: expected around four percent. 198 00:09:58,720 --> 00:10:01,640 Speaker 4: So you know, they're not there. 199 00:10:02,720 --> 00:10:05,720 Speaker 10: They do not want to raise prices. They want to 200 00:10:05,720 --> 00:10:08,920 Speaker 10: be competitive because obviously volume growth is not happening. 201 00:10:09,000 --> 00:10:12,040 Speaker 4: So yeah, I mean, they're getting competition from more folks. 202 00:10:12,240 --> 00:10:14,839 Speaker 4: I mean, on the one hand, they're benefiting from the 203 00:10:14,840 --> 00:10:17,040 Speaker 4: fact that more people are eating at home, right, but 204 00:10:17,120 --> 00:10:19,080 Speaker 4: yet when we're going to the supermarket, more people are 205 00:10:19,160 --> 00:10:22,320 Speaker 4: choosing those private label brands. What's their sort of you know, 206 00:10:22,400 --> 00:10:23,400 Speaker 4: plan of attack there. 207 00:10:23,720 --> 00:10:28,280 Speaker 10: Yeah, so they're increase in marketing, They're they're hoping for innovation. 208 00:10:28,920 --> 00:10:29,040 Speaker 7: Uh. 209 00:10:29,240 --> 00:10:33,000 Speaker 10: They mentioned that twenty five percent of sales growth will 210 00:10:33,040 --> 00:10:36,360 Speaker 10: come in North America retail will probably come from innovation 211 00:10:36,520 --> 00:10:40,800 Speaker 10: this year. And this is what all everybody's trying to 212 00:10:40,840 --> 00:10:43,400 Speaker 10: get to the problem is. And that was mentioned on 213 00:10:43,440 --> 00:10:46,480 Speaker 10: the call as well, was that even the price increases 214 00:10:46,520 --> 00:10:48,920 Speaker 10: are not as significant as it used to be, they're 215 00:10:48,960 --> 00:10:49,679 Speaker 10: still high. 216 00:10:50,200 --> 00:10:53,479 Speaker 4: So on a basket size. 217 00:10:53,440 --> 00:10:55,480 Speaker 10: You're still paying a lot more than the used to 218 00:10:55,600 --> 00:10:56,280 Speaker 10: two years ago. 219 00:10:56,920 --> 00:11:00,200 Speaker 2: Talk to us about store brands versus kind of the 220 00:11:00,200 --> 00:11:02,120 Speaker 2: the brands. We all grew up with. Here, tell us 221 00:11:02,120 --> 00:11:04,439 Speaker 2: how that's changed over time. Our store brands are becoming 222 00:11:04,440 --> 00:11:07,200 Speaker 2: a bigger, bigger part of the average cart. 223 00:11:07,760 --> 00:11:12,080 Speaker 10: Yes, well, retailers are investing more on their private label. 224 00:11:12,640 --> 00:11:15,160 Speaker 10: It allows them to bring people into the store. Some 225 00:11:15,240 --> 00:11:19,120 Speaker 10: of the brands are have a cult following. I will say, hello, 226 00:11:19,240 --> 00:11:24,360 Speaker 10: Costco so exactly, so people are going to the store 227 00:11:24,440 --> 00:11:28,920 Speaker 10: to buy that particular brand. They're more profitable than national brands, 228 00:11:29,200 --> 00:11:35,520 Speaker 10: So obviously they're still incentive for retailers to deploy some 229 00:11:35,600 --> 00:11:37,120 Speaker 10: of that some of their own I think. 230 00:11:37,040 --> 00:11:39,960 Speaker 4: Some people take it cheek to buy private label, right, Well, 231 00:11:40,320 --> 00:11:41,480 Speaker 4: we're at like a badge of honor. 232 00:11:42,000 --> 00:11:45,560 Speaker 2: Certainly. I was shocked at the price differential. 233 00:11:45,559 --> 00:11:47,760 Speaker 4: Yeah, because they have that pricing power right These stores 234 00:11:48,000 --> 00:11:50,160 Speaker 4: to you know, make their products a lot more attractive. 235 00:11:50,240 --> 00:11:53,160 Speaker 4: Really quick Blue Buffalo, it's their pet food. I was 236 00:11:53,200 --> 00:11:55,560 Speaker 4: surprised to see that that that was not a leader 237 00:11:55,600 --> 00:11:56,000 Speaker 4: for them. 238 00:11:56,360 --> 00:12:00,280 Speaker 10: Yeah, so Wilderness was not is not doing as well 239 00:12:00,280 --> 00:12:03,760 Speaker 10: as they are hoping. Dog food in general has been 240 00:12:03,960 --> 00:12:07,640 Speaker 10: a headwind, not only for them but also for the 241 00:12:07,720 --> 00:12:14,280 Speaker 10: overall industry. Cat food seems to be the leading indicator here, 242 00:12:14,559 --> 00:12:16,360 Speaker 10: which is surprising, but. 243 00:12:16,640 --> 00:12:18,520 Speaker 4: Cat food is outpacing dog food. 244 00:12:18,640 --> 00:12:21,080 Speaker 10: Yes, correct, We have seen this for the past year. 245 00:12:21,559 --> 00:12:24,640 Speaker 10: There seems to be a growth in the cat population 246 00:12:24,760 --> 00:12:26,480 Speaker 10: more than the dog population. 247 00:12:26,360 --> 00:12:29,320 Speaker 2: Thanks to Diana coming out. 248 00:12:29,360 --> 00:12:33,040 Speaker 4: We look at Elon's purchase of one billion dollars worth 249 00:12:33,080 --> 00:12:34,000 Speaker 4: of Tesla shares. 250 00:12:34,320 --> 00:12:37,280 Speaker 2: Listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth 251 00:12:37,280 --> 00:12:39,560 Speaker 2: research and data on two thousand companies and one hundred 252 00:12:39,600 --> 00:12:40,400 Speaker 2: and thirty industries. 253 00:12:40,559 --> 00:12:44,080 Speaker 4: You can access Bloomberg Intelligence via bi go on the terminal. 254 00:12:44,120 --> 00:12:46,480 Speaker 4: I'm Alexis Christophers and now Paul Sweeney. 255 00:12:46,600 --> 00:12:47,680 Speaker 9: This is Bloomberg. 256 00:12:51,800 --> 00:12:56,320 Speaker 1: This is Bloomberg Intelligence with Scarlett Foo and Paul Sweeney 257 00:12:56,679 --> 00:12:57,959 Speaker 1: on Bloomberg Radio. 258 00:12:58,520 --> 00:13:01,640 Speaker 2: I'm Paul Sweeney. Join this week by Alexis Christophers. We 259 00:13:01,760 --> 00:13:04,440 Speaker 2: moved to news from the ev giant Tesla. This week 260 00:13:04,480 --> 00:13:07,559 Speaker 2: Elon Musk purchased about one billion dollars worth of Tesla shares. 261 00:13:07,400 --> 00:13:09,439 Speaker 4: And this comes after the billionaire was awarded one of 262 00:13:09,520 --> 00:13:12,640 Speaker 4: the biggest pay packages in corporate history. For details, host 263 00:13:12,679 --> 00:13:14,920 Speaker 4: Scarlett Foo and guest host Isabelle Lee were joined by 264 00:13:14,960 --> 00:13:17,240 Speaker 4: Bloomberg Global Autos editor Craig Trudell. 265 00:13:17,400 --> 00:13:20,280 Speaker 11: There was an all out push with Robin Denholm the 266 00:13:20,360 --> 00:13:23,800 Speaker 11: chair of the company, speaking with us at Bloomberg Television, 267 00:13:23,840 --> 00:13:26,480 Speaker 11: speaking with you know, the New York Times, the Wall 268 00:13:26,520 --> 00:13:30,400 Speaker 11: Street Journal, all sorts of major news organizations about the 269 00:13:30,440 --> 00:13:32,959 Speaker 11: merits of this pay package that the board is proposing. 270 00:13:33,000 --> 00:13:35,800 Speaker 11: There's going to be a big shareholder vote in November 271 00:13:35,920 --> 00:13:40,199 Speaker 11: on handing you know, Musk, this this potentially up to 272 00:13:41,040 --> 00:13:44,840 Speaker 11: one trillion dollars worth of stock. There's a lot of 273 00:13:45,160 --> 00:13:47,560 Speaker 11: caveats all that that Musk would have to sort of 274 00:13:48,280 --> 00:13:50,679 Speaker 11: you know, pull a rabbit out of the hat again 275 00:13:50,760 --> 00:13:54,720 Speaker 11: after you know, doing so after a twenty eighteen pay 276 00:13:54,760 --> 00:13:57,800 Speaker 11: package where the board laid out out all these really 277 00:13:57,800 --> 00:14:02,400 Speaker 11: ambitious you know, market value and performance milestones. Musk, you know, 278 00:14:02,640 --> 00:14:04,480 Speaker 11: at that time it was kind of perceived as this 279 00:14:04,600 --> 00:14:09,400 Speaker 11: moonshot pay package. He proceeded to knock them all out, 280 00:14:09,480 --> 00:14:12,760 Speaker 11: and they're now calling this next pay package a mark 281 00:14:12,760 --> 00:14:16,720 Speaker 11: shot pay package. So, you know, I think there's this 282 00:14:16,720 --> 00:14:18,719 Speaker 11: This is all sort of part of a piece, right 283 00:14:18,960 --> 00:14:22,080 Speaker 11: of trying to get investors to sort of, you know, 284 00:14:22,160 --> 00:14:26,760 Speaker 11: focus on you know, far out there targets objectives from 285 00:14:26,800 --> 00:14:29,320 Speaker 11: Musks that would make shareholders a whole lot of money. 286 00:14:29,680 --> 00:14:32,720 Speaker 11: And it comes amid you know, real signs of stress 287 00:14:32,720 --> 00:14:35,240 Speaker 11: for the core here and now business for Tesla, where 288 00:14:35,760 --> 00:14:39,800 Speaker 11: their sales have just really struggled this year and there 289 00:14:39,880 --> 00:14:42,520 Speaker 11: haven't really been signs of of sort of meaningful change 290 00:14:42,520 --> 00:14:44,120 Speaker 11: in that trend even into this quarter. 291 00:14:44,400 --> 00:14:46,880 Speaker 3: Right, So this will properly motivate him. I'm so glad 292 00:14:46,920 --> 00:14:49,040 Speaker 3: you brought up the twenty eighteen pay package and some 293 00:14:49,120 --> 00:14:52,520 Speaker 3: of the moonshot milestones that laid out for Elon Musk. 294 00:14:52,800 --> 00:14:54,760 Speaker 3: What was the most I don't want to use the 295 00:14:54,760 --> 00:14:57,920 Speaker 3: word outrageous, but the most ambitious of those milestones, And 296 00:14:58,400 --> 00:15:01,240 Speaker 3: did he s each and every one of them? 297 00:15:01,520 --> 00:15:05,040 Speaker 11: Yeah, I mean in terms of the milestones there, I 298 00:15:05,120 --> 00:15:07,760 Speaker 11: mean just even the market cap figures. I think you know, 299 00:15:07,800 --> 00:15:10,480 Speaker 11: when when they were laid out, you know, it was 300 00:15:10,600 --> 00:15:12,920 Speaker 11: it was just sort of unfathomable that, you know, a 301 00:15:12,960 --> 00:15:15,560 Speaker 11: car company could be, you know, a trillion dollar company, 302 00:15:16,000 --> 00:15:18,720 Speaker 11: and you know, give give the guy credit. He went 303 00:15:18,760 --> 00:15:22,160 Speaker 11: out there and made it happen. You know. I think 304 00:15:22,760 --> 00:15:26,520 Speaker 11: Tesla now is trying to sort of, you know, incentivize 305 00:15:26,600 --> 00:15:30,320 Speaker 11: him to turn Tesla into a company that is many 306 00:15:30,360 --> 00:15:33,520 Speaker 11: multiples of even the VIDIA, the most valuable company in 307 00:15:34,640 --> 00:15:37,360 Speaker 11: the world in the here and now, and yet you know, 308 00:15:37,400 --> 00:15:39,960 Speaker 11: the sort of path to getting there is really uncertain 309 00:15:40,520 --> 00:15:43,840 Speaker 11: because you know, you've heard Musk make these pitches about 310 00:15:44,120 --> 00:15:48,920 Speaker 11: robotaxis and about humanoid robots. But you know, he is 311 00:15:48,960 --> 00:15:51,880 Speaker 11: a long way from accomplishing some of these new objectives 312 00:15:51,880 --> 00:15:52,920 Speaker 11: that the board has set for him. 313 00:15:53,520 --> 00:15:57,360 Speaker 6: This must buying shares personally, is governance concerns or could 314 00:15:57,360 --> 00:16:01,680 Speaker 6: it even actually reinforce skepticism about how closely Tesla's board 315 00:16:01,960 --> 00:16:04,080 Speaker 6: is aligned with his self interest. 316 00:16:04,480 --> 00:16:07,800 Speaker 11: Generally, whenever a CEO or an insider of a company 317 00:16:07,880 --> 00:16:09,920 Speaker 11: is buying shares, that's taken as a good thing and 318 00:16:09,920 --> 00:16:13,440 Speaker 11: not necessarily you know, something to look at skins at 319 00:16:13,480 --> 00:16:17,600 Speaker 11: from a corporate governance perspective. It does, however, I think 320 00:16:17,640 --> 00:16:20,040 Speaker 11: it's worth sort of you know, thinking about this billion 321 00:16:20,040 --> 00:16:23,800 Speaker 11: dollar purchase and context. This is a guy who's you know, 322 00:16:24,440 --> 00:16:26,440 Speaker 11: sort of you know, a billion dollars can be found 323 00:16:26,480 --> 00:16:29,840 Speaker 11: in his couch cushions, right he is is the top 324 00:16:29,840 --> 00:16:33,760 Speaker 11: person on the Bloomberg Billionaire's Index. He's worth about you know, 325 00:16:33,880 --> 00:16:37,760 Speaker 11: four hundred and twenty billion dollars at the moment, and 326 00:16:38,240 --> 00:16:41,560 Speaker 11: so you know just how meaningful this is. With any 327 00:16:41,600 --> 00:16:43,840 Speaker 11: other CEO, you would look at a billion dollar Stoft 328 00:16:43,840 --> 00:16:46,680 Speaker 11: purchase and maybe take you know, take real note of 329 00:16:46,720 --> 00:16:50,760 Speaker 11: that with Musk, Is it that huge a show of confidence? 330 00:16:50,840 --> 00:16:52,840 Speaker 11: Maybe not in the context of, you know, just how 331 00:16:52,880 --> 00:16:53,760 Speaker 11: much wealth he has. 332 00:16:54,000 --> 00:16:56,400 Speaker 2: Our thanks to Craig Drudell, Bloomberg Global Autos Editor. 333 00:16:56,800 --> 00:16:59,840 Speaker 4: Keeping with Tesla, we're going to move now to door safety. 334 00:17:00,040 --> 00:17:03,000 Speaker 2: This week, US auto safety regulators open an investigation into 335 00:17:03,000 --> 00:17:05,000 Speaker 2: whether Tesla door handles are defective. 336 00:17:05,119 --> 00:17:08,919 Speaker 4: And this comes after a Bloomberg exclusive saying NHTSA received 337 00:17:08,920 --> 00:17:12,040 Speaker 4: complaints that Tesla's design features like the door handles are 338 00:17:12,040 --> 00:17:14,040 Speaker 4: confusing occupants and first responders. 339 00:17:14,160 --> 00:17:16,440 Speaker 2: For more, Scarlett Fille and Stacey Vandock Smith were joined 340 00:17:16,480 --> 00:17:20,040 Speaker 2: by Steve Man Bloomberg Intelligence, Global Autos and Industrials Research Channels. 341 00:17:20,160 --> 00:17:24,720 Speaker 12: Well, it is a very serious situations, serious safety situation. Now, 342 00:17:25,119 --> 00:17:29,240 Speaker 12: first of all, there is a manual release from the 343 00:17:29,280 --> 00:17:33,399 Speaker 12: interior of the vehicle. But the safety issue is that 344 00:17:33,520 --> 00:17:37,000 Speaker 12: you can't manually override the electronics and open the door 345 00:17:37,040 --> 00:17:42,160 Speaker 12: from the outside. Now, this is an issue that's I'm 346 00:17:42,200 --> 00:17:46,960 Speaker 12: plaguing the whole industry. It's not just Tesla, okay, and 347 00:17:47,640 --> 00:17:50,320 Speaker 12: you know there's there's a number of automakers have solved 348 00:17:50,320 --> 00:17:53,760 Speaker 12: the issue, and I think Tesla does need to solve 349 00:17:53,800 --> 00:17:58,280 Speaker 12: this issue because you know, you know, people have died 350 00:17:58,359 --> 00:18:02,359 Speaker 12: because of this problem. Here, I think from the investor's perspective, 351 00:18:02,440 --> 00:18:05,240 Speaker 12: there is a solution. There is a number of vehicles. 352 00:18:05,280 --> 00:18:08,560 Speaker 12: For example, the Aldi they have actually solved that issue, 353 00:18:08,960 --> 00:18:12,280 Speaker 12: and they they solved it by you know, having a 354 00:18:12,320 --> 00:18:16,000 Speaker 12: double pull on the latch to actually open the vehicle manually. 355 00:18:16,080 --> 00:18:19,280 Speaker 12: So I think from an investor perspective, it is an issue. 356 00:18:19,680 --> 00:18:23,359 Speaker 12: It needs to be solved, and it's solvable. As you know, 357 00:18:23,520 --> 00:18:28,600 Speaker 12: the trillion dollar pay package and uh and the reieration 358 00:18:28,800 --> 00:18:32,879 Speaker 12: of the company moving towards AI is really getting the 359 00:18:32,920 --> 00:18:37,760 Speaker 12: investor very excited. The robo taxi is rolling out, apparently 360 00:18:37,800 --> 00:18:41,399 Speaker 12: the extended the model Y is selling really well in China. 361 00:18:41,960 --> 00:18:45,000 Speaker 12: So and then in Europe, where we saw a lot 362 00:18:45,000 --> 00:18:48,800 Speaker 12: of decline in ev sales seems to be ticking up. 363 00:18:48,960 --> 00:18:52,000 Speaker 3: But the pay package rewards Elon Musk for thinking really big, 364 00:18:52,080 --> 00:18:55,840 Speaker 3: not dealing with how to unlock car doors. In the 365 00:18:55,880 --> 00:18:58,879 Speaker 3: event of some kind of problem, you say that Audi 366 00:18:58,920 --> 00:19:01,639 Speaker 3: has solved this, Are Tesla engineers going to take their 367 00:19:01,680 --> 00:19:02,320 Speaker 3: queue from Audi? 368 00:19:03,040 --> 00:19:07,199 Speaker 12: Possibly? Really? Yeah, I mean it's it's it's important. It's 369 00:19:07,280 --> 00:19:10,960 Speaker 12: important that they solve this because Tesla, when they roll 370 00:19:10,960 --> 00:19:14,440 Speaker 12: out the robo taxi, safety is an important issue for them, 371 00:19:14,560 --> 00:19:16,679 Speaker 12: and it's an important issue not just for Tesla, I 372 00:19:16,680 --> 00:19:21,120 Speaker 12: think for the whole industry, and it's a reputation that 373 00:19:21,160 --> 00:19:24,280 Speaker 12: they're trying to build, especially you know they're they try 374 00:19:24,320 --> 00:19:26,880 Speaker 12: to roll out robo taxi and you know, they want 375 00:19:26,920 --> 00:19:31,320 Speaker 12: to project themselves as a safe automaker. So I think 376 00:19:31,359 --> 00:19:34,639 Speaker 12: it's going to be a priority list for for Elon 377 00:19:34,760 --> 00:19:36,600 Speaker 12: Musk and the rest of the organization there. 378 00:19:37,280 --> 00:19:42,919 Speaker 13: It does also seem that that people are feeling quite 379 00:19:43,200 --> 00:19:45,720 Speaker 13: optimistic about this stock, but also there's there does seem 380 00:19:45,760 --> 00:19:49,040 Speaker 13: to be a liability issue in addition to a need 381 00:19:49,080 --> 00:19:51,280 Speaker 13: to solve this problem issue. Is that at all concern? 382 00:19:51,720 --> 00:19:52,480 Speaker 7: Yeah, it is. 383 00:19:52,520 --> 00:19:56,119 Speaker 12: It is a liability and I wouldn't be surprised that, 384 00:19:56,840 --> 00:19:59,600 Speaker 12: you know, there's going to be other legal issue that 385 00:19:59,600 --> 00:20:03,040 Speaker 12: that come up. I think from an investor perspective, this 386 00:20:03,119 --> 00:20:07,840 Speaker 12: is normal. Business recalls are normal and there are other 387 00:20:07,920 --> 00:20:12,560 Speaker 12: safety issues that has been recall not just at Tesla, 388 00:20:12,640 --> 00:20:17,119 Speaker 12: but and other automakers. So I think the investor are 389 00:20:17,200 --> 00:20:21,720 Speaker 12: taking this. I don't want to say lightly, but it's 390 00:20:21,800 --> 00:20:25,400 Speaker 12: normal business that we're going to get over this. 391 00:20:25,480 --> 00:20:28,159 Speaker 3: It's a work in progress. Yes, are there other safety 392 00:20:28,200 --> 00:20:31,360 Speaker 3: issues in particular that Tesla needs to focus on pay 393 00:20:31,400 --> 00:20:35,880 Speaker 3: attention to that could, if left unresolved, could become legal 394 00:20:35,920 --> 00:20:36,760 Speaker 3: liability issues. 395 00:20:37,040 --> 00:20:41,600 Speaker 12: Robotaxi there's still a safety driver sitting on a passenger 396 00:20:41,680 --> 00:20:44,919 Speaker 12: seat pretty much on every Robotaxi. I think there is 397 00:20:45,000 --> 00:20:48,679 Speaker 12: discussions of taking the safety driver out at the end 398 00:20:48,720 --> 00:20:51,240 Speaker 12: of the year, but I think they need to tread 399 00:20:51,480 --> 00:20:56,000 Speaker 12: very very carefully, especially for Tesla. It's a high profile company. 400 00:20:57,119 --> 00:21:00,480 Speaker 12: Anything negative is going to damage the reputation, and so 401 00:21:01,080 --> 00:21:03,960 Speaker 12: if they don't take up the safety driver at the 402 00:21:04,040 --> 00:21:07,240 Speaker 12: end of year, I wouldn't be surprised. I think they 403 00:21:07,280 --> 00:21:09,800 Speaker 12: do need to take it one step at a time 404 00:21:09,840 --> 00:21:14,280 Speaker 12: and make sure everything goes well before they do a 405 00:21:14,320 --> 00:21:15,960 Speaker 12: full launch without the safety driver. 406 00:21:16,440 --> 00:21:19,320 Speaker 2: Our thanks to Steve Mann Bloomberg Intelligence, the global autos 407 00:21:19,320 --> 00:21:20,920 Speaker 2: and industrials research analysts, and. 408 00:21:20,880 --> 00:21:23,400 Speaker 4: Each week we look at research from Bloomberg n EF 409 00:21:23,440 --> 00:21:25,640 Speaker 4: previously known as New Energy Finance. 410 00:21:25,760 --> 00:21:27,879 Speaker 2: They're the team at Bloomberg that tracks and analyzes the 411 00:21:27,960 --> 00:21:31,879 Speaker 2: energy transition from commodities to power, transport, industries, buildings, and 412 00:21:31,960 --> 00:21:35,399 Speaker 2: agricultural sectors. This week, look that data center Demand and 413 00:21:35,760 --> 00:21:39,520 Speaker 2: R Plus north America's biggest renewable energy conference. 414 00:21:39,840 --> 00:21:42,159 Speaker 4: For more, host Scarlett Food and guest hosts Isabelle Lee 415 00:21:42,240 --> 00:21:46,160 Speaker 4: were joined by Derek flackl BNEF, lead US policy analyst. 416 00:21:46,480 --> 00:21:48,080 Speaker 14: Ri E Plus and Real Energy Plus is one of 417 00:21:48,080 --> 00:21:51,760 Speaker 14: the biggest conferences in North America. You see battery manufacturers, 418 00:21:51,840 --> 00:21:54,840 Speaker 14: transform manufacturers, energy storage manufacturers from all over the world 419 00:21:54,880 --> 00:21:57,560 Speaker 14: hawking their wares, and basically what everybody is trying to 420 00:21:57,600 --> 00:22:00,720 Speaker 14: do is rush to build, rush to safe harbor in 421 00:22:00,800 --> 00:22:03,040 Speaker 14: order to get legal compliance, to get tax credits in 422 00:22:03,080 --> 00:22:05,760 Speaker 14: the US government before rules change at the end of 423 00:22:05,800 --> 00:22:07,840 Speaker 14: the year. Now, as a reminder, those who are following 424 00:22:07,840 --> 00:22:10,200 Speaker 14: the Trump administration will recall the one big Beautiful bill, 425 00:22:10,440 --> 00:22:12,159 Speaker 14: a big budget act passed to the middle of the 426 00:22:12,240 --> 00:22:15,000 Speaker 14: year that has substantial changes for the way that you 427 00:22:15,000 --> 00:22:17,560 Speaker 14: can claim tax credits. If you're a window solar project, 428 00:22:17,600 --> 00:22:20,040 Speaker 14: you have to get under construction by a certain deadline 429 00:22:20,119 --> 00:22:21,919 Speaker 14: or you face an even harder cut off or when 430 00:22:21,960 --> 00:22:24,280 Speaker 14: your project can enter service, and at the beginning of 431 00:22:24,400 --> 00:22:27,080 Speaker 14: next year, suddenly you've gotten new foreign entity of concern 432 00:22:27,200 --> 00:22:29,960 Speaker 14: rules that could make you in eligible for tax credits 433 00:22:29,960 --> 00:22:33,240 Speaker 14: based on your exposure to mostly Chinese firms, whether through 434 00:22:33,240 --> 00:22:36,560 Speaker 14: corporate ownership, through supply chains, or through intellectual property and 435 00:22:36,600 --> 00:22:39,960 Speaker 14: other agreements. You're seeing firms restructure themselves in order to 436 00:22:40,040 --> 00:22:43,480 Speaker 14: avoid getting hit by those rules. You're seeing developers build 437 00:22:43,520 --> 00:22:46,680 Speaker 14: up massive stocks of solar and energy storage in order 438 00:22:46,720 --> 00:22:51,040 Speaker 14: to try and have equipment that allows them to claim 439 00:22:51,040 --> 00:22:53,280 Speaker 14: those credits before the rules come into effect. And you 440 00:22:53,359 --> 00:22:57,960 Speaker 14: also have massive growth in US battery factories and new 441 00:22:58,000 --> 00:23:01,360 Speaker 14: players entering the market to try and ser more domestic demand. 442 00:23:01,680 --> 00:23:04,199 Speaker 14: So you see this combination of a rush with the 443 00:23:04,240 --> 00:23:06,960 Speaker 14: possibility of a cliff afterwards. And I think everybody is 444 00:23:07,040 --> 00:23:09,560 Speaker 14: waiting for new rules to come out to provide some 445 00:23:09,600 --> 00:23:12,000 Speaker 14: clarity on exactly how much of the market can survive 446 00:23:12,040 --> 00:23:12,680 Speaker 14: the shift. 447 00:23:12,960 --> 00:23:15,919 Speaker 3: How anxious were the companies and the executives at this 448 00:23:16,000 --> 00:23:20,320 Speaker 3: event because, as you mentioned, they are moving quickly because 449 00:23:20,720 --> 00:23:23,080 Speaker 3: the rules could change on them. The goalposts could change 450 00:23:23,119 --> 00:23:25,840 Speaker 3: at any point. What is the one certainty that they 451 00:23:25,920 --> 00:23:29,399 Speaker 3: have in operating through this uncertainty. 452 00:23:30,440 --> 00:23:33,280 Speaker 14: I think the one certainty that they have besides that 453 00:23:33,359 --> 00:23:35,760 Speaker 14: more change is coming, is that there is going to 454 00:23:35,880 --> 00:23:38,520 Speaker 14: be load growth in the grid as a kind of 455 00:23:38,960 --> 00:23:41,280 Speaker 14: tailwind supporting the market in phase of other headwinds. Right, 456 00:23:41,320 --> 00:23:44,280 Speaker 14: we all know that data centers, among other applications like 457 00:23:44,320 --> 00:23:48,640 Speaker 14: new manufacturing and electrification, are causing electricity demand to rise 458 00:23:48,680 --> 00:23:50,399 Speaker 14: for the first time in the US in about two decades, 459 00:23:50,440 --> 00:23:53,679 Speaker 14: and at very fast, kind of chunky rates. So that 460 00:23:53,800 --> 00:23:56,119 Speaker 14: in turn means that electricity prices are going to have 461 00:23:56,160 --> 00:23:59,280 Speaker 14: to go up, especially given that the tax credits that 462 00:23:59,320 --> 00:24:02,760 Speaker 14: were sort of subing new power build are going away 463 00:24:02,880 --> 00:24:05,600 Speaker 14: or at least being severely reduced. That in turn is 464 00:24:05,640 --> 00:24:08,280 Speaker 14: going to make the economic case work out for more projects. 465 00:24:08,560 --> 00:24:11,400 Speaker 14: But that is filled with uncertainties in and of itself. Right, 466 00:24:11,440 --> 00:24:15,600 Speaker 14: you have different utility markets, different states trying to change 467 00:24:15,640 --> 00:24:18,960 Speaker 14: the way that power is paid for by large load 468 00:24:18,960 --> 00:24:22,159 Speaker 14: customers like data centers, and where the cost falls, how 469 00:24:22,160 --> 00:24:25,160 Speaker 14: many projects get built, how much public utility comissions allow 470 00:24:25,160 --> 00:24:27,520 Speaker 14: given the cost increases that most rate payers are going 471 00:24:27,560 --> 00:24:31,720 Speaker 14: to see. That's a source of uncertainty even within that certainty, 472 00:24:32,000 --> 00:24:34,080 Speaker 14: And so you see at riplus there was a lot 473 00:24:34,119 --> 00:24:37,800 Speaker 14: of talk of virtual power plants or special timing on 474 00:24:37,960 --> 00:24:41,720 Speaker 14: electric vehicle charging, anything to sort of keep the electricity 475 00:24:41,720 --> 00:24:45,680 Speaker 14: system from being overbuilt because as a reminder, way the 476 00:24:45,720 --> 00:24:48,399 Speaker 14: electricity system is structured is for the hottest and coldest 477 00:24:48,440 --> 00:24:50,560 Speaker 14: days of the year, when there's the largest amount of 478 00:24:50,600 --> 00:24:53,320 Speaker 14: electricity demand. A huge amount of cost is driven by that, 479 00:24:53,440 --> 00:24:55,480 Speaker 14: and there's extra capacity that goes unused. A lot of 480 00:24:55,480 --> 00:24:58,760 Speaker 14: the time. People are trying to get creative about how 481 00:24:58,800 --> 00:25:01,280 Speaker 14: you use more capacity it's already on the grid to 482 00:25:01,280 --> 00:25:04,080 Speaker 14: prevent things from getting more expensive for customers, or if 483 00:25:04,080 --> 00:25:06,360 Speaker 14: you do need to build new stuff, basically putting those 484 00:25:06,359 --> 00:25:10,120 Speaker 14: costs on two data centers themselves. Nevertheless, there is still 485 00:25:10,160 --> 00:25:12,840 Speaker 14: a key tailwind in the face of this policy uncertainty. 486 00:25:12,840 --> 00:25:14,880 Speaker 14: It's just a question of what that actually means for 487 00:25:15,000 --> 00:25:15,920 Speaker 14: every other customer. 488 00:25:16,160 --> 00:25:18,159 Speaker 2: Thanks to Derek Flack will be n EF lead at 489 00:25:18,200 --> 00:25:19,240 Speaker 2: US Policy Analyst. 490 00:25:19,440 --> 00:25:21,720 Speaker 4: Coming up, we look at how the global sports industry 491 00:25:21,800 --> 00:25:23,439 Speaker 4: is huge and growing rapidly. 492 00:25:23,600 --> 00:25:26,439 Speaker 2: You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in 493 00:25:26,480 --> 00:25:28,720 Speaker 2: depth research and data on two thousand companies and one 494 00:25:28,760 --> 00:25:29,840 Speaker 2: hundred and thirty industries. 495 00:25:30,000 --> 00:25:33,200 Speaker 4: You can access Bloomberg Intelligence via Big on the terminal. 496 00:25:33,359 --> 00:25:35,600 Speaker 4: I'm Alexis Christoffers and I'm Paul Sweeney. 497 00:25:35,680 --> 00:25:36,800 Speaker 2: This is Bloomberg. 498 00:25:41,800 --> 00:25:44,760 Speaker 15: As veterans We're no strangers to helping others. 499 00:25:45,320 --> 00:25:47,760 Speaker 7: It's what we were taught, trained and told to do. 500 00:25:48,520 --> 00:25:50,920 Speaker 9: It could be for anything, helping a friend. 501 00:25:50,720 --> 00:25:54,880 Speaker 15: Move, listening to a fellow veteran for hours at any hour. 502 00:25:54,680 --> 00:25:55,160 Speaker 12: Of the day. 503 00:25:55,440 --> 00:25:59,040 Speaker 7: We just simply making time for people. A neighbor, a 504 00:25:59,119 --> 00:26:01,200 Speaker 7: loved one, or a stranger. 505 00:26:01,280 --> 00:26:03,720 Speaker 9: Where often the first to help. All this, there's no 506 00:26:03,840 --> 00:26:04,560 Speaker 9: question about it. 507 00:26:04,880 --> 00:26:07,719 Speaker 15: But we do have one question for the veterans listening. 508 00:26:09,280 --> 00:26:11,359 Speaker 9: When is the last time you reached out for help. 509 00:26:11,800 --> 00:26:14,480 Speaker 7: Perhaps it's time to do for yourself what you would 510 00:26:14,480 --> 00:26:15,480 Speaker 7: do for others. 511 00:26:16,000 --> 00:26:19,200 Speaker 15: If you or someone you know needs resources, whether it's 512 00:26:19,240 --> 00:26:25,160 Speaker 15: for stress, finances, employment, or mental health, don't wait reach out. 513 00:26:26,359 --> 00:26:29,840 Speaker 9: Find more information at VA dot gov slash reach. That's 514 00:26:29,960 --> 00:26:32,160 Speaker 9: VA dot gov slash Reach. 515 00:26:33,200 --> 00:26:35,240 Speaker 10: Brought to you by the United States Department of Veterans 516 00:26:35,280 --> 00:26:36,440 Speaker 10: Affairs and the AD Council. 517 00:26:40,720 --> 00:26:45,240 Speaker 1: This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney 518 00:26:45,560 --> 00:26:46,879 Speaker 1: on Bloomberg Radio. 519 00:26:47,280 --> 00:26:51,280 Speaker 2: Paul Sweeney joined this week by Alexis Christopher's. Franchise valuations 520 00:26:51,280 --> 00:26:54,960 Speaker 2: are surging across the two point sixty five trillion dollar 521 00:26:55,040 --> 00:26:58,280 Speaker 2: global sports industry, with three year analyzed growth rates running 522 00:26:58,280 --> 00:27:00,520 Speaker 2: at it double digit pace across the majors. 523 00:27:00,800 --> 00:27:03,800 Speaker 4: A loosening of ownership restrictions is driving an influx of 524 00:27:03,880 --> 00:27:08,480 Speaker 4: institutional capital into professional sports franchises, enabling access to a 525 00:27:08,520 --> 00:27:10,600 Speaker 4: deeper pool of potential investors. 526 00:27:10,720 --> 00:27:13,159 Speaker 2: We broke down the numbers with BI analysts and Business 527 00:27:13,160 --> 00:27:14,800 Speaker 2: of Sports co hosts Damian Sasauer. 528 00:27:14,840 --> 00:27:17,760 Speaker 16: Two point six five trillion is revenue generated or expected 529 00:27:17,800 --> 00:27:20,040 Speaker 16: revenue to be generated just this year alone from the 530 00:27:20,040 --> 00:27:22,800 Speaker 16: global business of sports. So let's put some color around it, 531 00:27:22,840 --> 00:27:25,639 Speaker 16: and really it's everything from the sixty billion dollars a 532 00:27:25,720 --> 00:27:28,160 Speaker 16: year that's generated from METIA rights, the thirty billion dollars 533 00:27:28,200 --> 00:27:30,000 Speaker 16: in advertising spend. But if you want to take that 534 00:27:30,040 --> 00:27:32,880 Speaker 16: two point six five trillion and it's recreational vehicles, it's 535 00:27:32,880 --> 00:27:36,240 Speaker 16: a parrel. It's everything. What we focus on is fan engagement, 536 00:27:36,240 --> 00:27:38,840 Speaker 16: and fan engagement is roughly seven hundred and fifty billion 537 00:27:38,920 --> 00:27:42,320 Speaker 16: in revenue generator per year, and there's no better mechanism 538 00:27:42,359 --> 00:27:45,359 Speaker 16: to take advantage of that segment than to own a 539 00:27:45,359 --> 00:27:46,360 Speaker 16: professional sports team. 540 00:27:46,400 --> 00:27:46,840 Speaker 11: But you cannot. 541 00:27:46,880 --> 00:27:50,119 Speaker 16: Everyone can own one, right they're privately listed or I'm sorry, 542 00:27:50,000 --> 00:27:53,640 Speaker 16: they're not publicly listed. They're private entities. You just can't 543 00:27:53,640 --> 00:27:55,920 Speaker 16: invest in them easily. So together with Brian Dougherty, get 544 00:27:55,960 --> 00:27:58,840 Speaker 16: the Raganathan, Kevin Niar and the whole team here at BI, 545 00:27:59,160 --> 00:28:00,800 Speaker 16: we came up with some way is that you know, 546 00:28:00,840 --> 00:28:02,960 Speaker 16: your everyday investor might be able to take advantage of 547 00:28:02,960 --> 00:28:05,920 Speaker 16: the opportunity set in the global business of sports. And 548 00:28:05,960 --> 00:28:08,400 Speaker 16: we wrote a huge research report on it and it's 549 00:28:08,440 --> 00:28:08,920 Speaker 16: really good. 550 00:28:09,200 --> 00:28:12,000 Speaker 6: We did watch your twelve minutes segment and then you 551 00:28:12,040 --> 00:28:14,720 Speaker 6: said that the difference is the sports industry has limited 552 00:28:14,760 --> 00:28:15,560 Speaker 6: public access. 553 00:28:15,960 --> 00:28:17,159 Speaker 17: Is that for the better? 554 00:28:17,480 --> 00:28:20,720 Speaker 16: So it's changing, So the rules changes, specifically with regard 555 00:28:20,800 --> 00:28:23,359 Speaker 16: to private equity investment in the NFL. I mean the 556 00:28:23,440 --> 00:28:25,720 Speaker 16: NFL is first among equals. I mean their national media 557 00:28:25,760 --> 00:28:28,400 Speaker 16: deal is eleven years, one hundred and ten billion, something 558 00:28:28,440 --> 00:28:30,840 Speaker 16: along those lines. It's twelve billion and average annual value 559 00:28:30,880 --> 00:28:34,159 Speaker 16: per team. It dominates professional sports. But really, at the 560 00:28:34,240 --> 00:28:36,240 Speaker 16: end of the day, you know what you are seeing 561 00:28:36,240 --> 00:28:38,480 Speaker 16: here from some of the recent transactions that have taken 562 00:28:38,480 --> 00:28:41,720 Speaker 16: place in the private space. Talking the Philadelphia Eagles, the 563 00:28:41,760 --> 00:28:43,840 Speaker 16: Buffalo Bills, a lot of these teams have sold small 564 00:28:43,920 --> 00:28:47,040 Speaker 16: minority interests in their teams to private equity. It's driven 565 00:28:47,280 --> 00:28:51,320 Speaker 16: the entire the entire universe higher so to put some 566 00:28:50,960 --> 00:28:55,560 Speaker 16: some numbers around it, since year end alone, the average 567 00:28:56,320 --> 00:28:59,560 Speaker 16: NFL team has gone up by thirty five percent in valuation. 568 00:28:59,680 --> 00:29:02,520 Speaker 16: So the top twenty five teams across all of professional 569 00:29:02,520 --> 00:29:05,959 Speaker 16: sports I'm including international sports like soccer, the NFL now 570 00:29:06,000 --> 00:29:08,680 Speaker 16: comprises twenty two of the top twenty five slots alone, 571 00:29:08,840 --> 00:29:10,720 Speaker 16: led by the Dallas Cowboys of course, but the Jets 572 00:29:10,720 --> 00:29:12,520 Speaker 16: are up there. So yeah, no, I mean like it 573 00:29:12,640 --> 00:29:16,200 Speaker 16: used to have a sparring of the yeah, right, despite 574 00:29:16,200 --> 00:29:17,760 Speaker 16: their best effort, Scarlett, but you know, used to have 575 00:29:17,840 --> 00:29:20,800 Speaker 16: FC Barcelona, Real Madrid, you have, you know, some baseball 576 00:29:20,800 --> 00:29:22,840 Speaker 16: teams like the Yankees, Dodgers in Red Sox that used 577 00:29:22,840 --> 00:29:24,040 Speaker 16: to be up there, and a lot of them have 578 00:29:24,200 --> 00:29:26,840 Speaker 16: kind of fallen back due to the fact that private 579 00:29:26,840 --> 00:29:29,320 Speaker 16: equity is now and allowed to invest in the NFL. 580 00:29:29,600 --> 00:29:32,000 Speaker 3: Okay, I mean private equity being allowed to invest in 581 00:29:32,040 --> 00:29:34,760 Speaker 3: the NFL was definitely a watershed moment, but private equity 582 00:29:34,760 --> 00:29:37,440 Speaker 3: was allowed to invest in European football clubs for a 583 00:29:37,440 --> 00:29:38,320 Speaker 3: lot longer before. 584 00:29:38,360 --> 00:29:39,720 Speaker 15: We're different sport, yeah. 585 00:29:39,640 --> 00:29:40,360 Speaker 7: Very different sport. 586 00:29:40,400 --> 00:29:42,640 Speaker 3: But I'm curious in terms of the breakdown of that 587 00:29:42,640 --> 00:29:44,920 Speaker 3: two point sixty five trillion dollar number, how much of 588 00:29:44,960 --> 00:29:47,560 Speaker 3: that is tied to the NFL. How much of that 589 00:29:47,640 --> 00:29:49,560 Speaker 3: is tied to things like European soccer. 590 00:29:49,880 --> 00:29:52,920 Speaker 16: Well, I mean it's a much smaller percentage than that, right, 591 00:29:52,960 --> 00:29:54,600 Speaker 16: because I mean that two point six to five trillion 592 00:29:54,640 --> 00:29:56,720 Speaker 16: that's generated a year. I mean, again, it has everything 593 00:29:56,760 --> 00:29:59,040 Speaker 16: to do with recreational vehicles, the footwear in a parrel. 594 00:29:59,080 --> 00:30:00,520 Speaker 16: But if you're just talking about a sports team and 595 00:30:00,520 --> 00:30:04,000 Speaker 16: how they generate their money, it's just really national media 596 00:30:04,040 --> 00:30:07,640 Speaker 16: rights or local sports media rights, and it's gate receipts primarily, 597 00:30:07,680 --> 00:30:10,520 Speaker 16: you know, ticketing, parking concessions, the things that you pay 598 00:30:10,520 --> 00:30:12,320 Speaker 16: for when you go to an event. Right, So you know, 599 00:30:12,320 --> 00:30:13,760 Speaker 16: if you just want to talk about gate receipts, I 600 00:30:13,760 --> 00:30:15,560 Speaker 16: mean one hundred and sixty two game schedule for the 601 00:30:15,560 --> 00:30:18,800 Speaker 16: Major League Baseball, they dominate in gate receipts, but in 602 00:30:18,960 --> 00:30:21,720 Speaker 16: national media rights, which is the real animal that everyone's 603 00:30:21,800 --> 00:30:24,040 Speaker 16: chasing right now. You hear about the NBA's new media 604 00:30:24,120 --> 00:30:26,760 Speaker 16: rights deal F one UFC. The Major League Baseball just 605 00:30:26,800 --> 00:30:30,760 Speaker 16: did something new there as well. You know, it's the NFL. 606 00:30:30,840 --> 00:30:33,200 Speaker 16: I mean, the NFL is first among equals and national 607 00:30:33,240 --> 00:30:36,560 Speaker 16: media deals. It represents seventy five percent of every team's 608 00:30:36,600 --> 00:30:40,480 Speaker 16: average annual value revenue that's generated every year. So yeah, 609 00:30:40,640 --> 00:30:42,520 Speaker 16: you know, I mean, you know, these national media deals 610 00:30:42,560 --> 00:30:44,560 Speaker 16: are huge, and now that the NBA just did its 611 00:30:44,560 --> 00:30:47,480 Speaker 16: big deal, we expect that, you know, come, I believe 612 00:30:47,520 --> 00:30:50,760 Speaker 16: twenty twenty eight, Scarlet, the NFL is going to re up. 613 00:30:50,760 --> 00:30:53,360 Speaker 16: It has the ability to buy out of its existing 614 00:30:53,560 --> 00:30:56,480 Speaker 16: contract and renegotiate it, and it definitely is going to 615 00:30:56,520 --> 00:30:58,720 Speaker 16: do that. And I think that's what's commanding a lot 616 00:30:58,760 --> 00:31:02,040 Speaker 16: of these valuations because in specifically private equity investors, they 617 00:31:02,040 --> 00:31:03,280 Speaker 16: see this and they want to take. 618 00:31:03,120 --> 00:31:03,760 Speaker 9: Advantage of it. 619 00:31:03,800 --> 00:31:06,200 Speaker 6: Can you talk about the revenue mix, because it varies 620 00:31:06,240 --> 00:31:08,840 Speaker 6: across major leagues. I'm looking at this really pretty table 621 00:31:08,880 --> 00:31:11,440 Speaker 6: you have for NFL, the biggest driver is national media. 622 00:31:11,560 --> 00:31:11,720 Speaker 2: Yep. 623 00:31:11,880 --> 00:31:15,000 Speaker 6: For NHL, and I'm eyeballing here, it's ticket sales and 624 00:31:15,040 --> 00:31:17,880 Speaker 6: it seems like concessions slash parking. Who would have thought 625 00:31:18,440 --> 00:31:20,720 Speaker 6: is kind of a significant chunk across all of them. 626 00:31:20,840 --> 00:31:22,560 Speaker 6: What do you think will be the single biggest driver 627 00:31:22,640 --> 00:31:23,720 Speaker 6: or is it really going to be different? 628 00:31:23,800 --> 00:31:26,760 Speaker 16: Well, that's only because the average franchise value to revenue 629 00:31:26,840 --> 00:31:29,640 Speaker 16: multiple for the NHL is just seven point seven times. 630 00:31:29,680 --> 00:31:31,560 Speaker 16: I mean, in the NFL's case, it's twelve and a 631 00:31:31,600 --> 00:31:32,160 Speaker 16: half times. 632 00:31:32,960 --> 00:31:36,840 Speaker 3: NFL isn't a league of it, nothing else even compares, correct. 633 00:31:36,520 --> 00:31:38,600 Speaker 16: I mean, but you might argue, I mean, look, despite 634 00:31:38,600 --> 00:31:40,760 Speaker 16: the fact that the NHL generates you know, call it, 635 00:31:41,120 --> 00:31:44,320 Speaker 16: I don't know, two billion dollars in revenue per year 636 00:31:44,360 --> 00:31:47,520 Speaker 16: on average, you know, it's still it's multiple still smaller 637 00:31:47,520 --> 00:31:49,680 Speaker 16: than that of Major League Soccer, which generates much less. 638 00:31:49,720 --> 00:31:51,120 Speaker 16: And again that just has to do with the fact 639 00:31:51,120 --> 00:31:54,040 Speaker 16: that you have all these MLS valuations now on the 640 00:31:54,080 --> 00:31:57,320 Speaker 16: back of you know, some great European players like Messi 641 00:31:57,320 --> 00:31:59,400 Speaker 16: who are now coming to play in places like Miami. 642 00:31:59,640 --> 00:32:02,240 Speaker 16: Just try up a lot of these valuations and so yeah, 643 00:32:02,400 --> 00:32:04,600 Speaker 16: you know, I mean, you know, we're still in early days. 644 00:32:04,600 --> 00:32:08,440 Speaker 16: But really it's the entrance of institutional capital, Isabelle, that's 645 00:32:08,480 --> 00:32:11,440 Speaker 16: really driving everything higher. You know, for the first time ever, 646 00:32:11,760 --> 00:32:15,720 Speaker 16: you know, institutional investors are gaining access to these sports 647 00:32:15,760 --> 00:32:18,120 Speaker 16: teams and they are looking to you know, get a 648 00:32:18,160 --> 00:32:20,360 Speaker 16: high return on investment from them. And just to be 649 00:32:20,440 --> 00:32:23,680 Speaker 16: very clear, you mentioned soccer before, because of relegation on 650 00:32:23,720 --> 00:32:25,320 Speaker 16: all these things. In soccer, in the fact that there's 651 00:32:25,320 --> 00:32:28,560 Speaker 16: no salary cap is very very difficult to extract a 652 00:32:28,640 --> 00:32:32,560 Speaker 16: profit from owning a EPL team, a European Premier League team, 653 00:32:32,560 --> 00:32:35,600 Speaker 16: whereas the salary cap allows for you know, I guess 654 00:32:35,960 --> 00:32:38,400 Speaker 16: better profit generation in the US. And so I think 655 00:32:38,440 --> 00:32:41,000 Speaker 16: that's one element to why you're seeing a lot of 656 00:32:41,000 --> 00:32:44,320 Speaker 16: the evaluations for these real Madrid FC, Barcelona come off 657 00:32:44,360 --> 00:32:45,360 Speaker 16: relative to the NFL. 658 00:32:45,560 --> 00:32:48,520 Speaker 3: So owning a European soccer club is more about bragging 659 00:32:48,600 --> 00:32:50,800 Speaker 3: rights than actually making money. Is that Is that what 660 00:32:50,800 --> 00:32:51,240 Speaker 3: I'm saying. 661 00:32:51,320 --> 00:32:53,920 Speaker 16: I would say no, not entirely. I would say yes, 662 00:32:53,960 --> 00:32:56,560 Speaker 16: it's definitely a trophy asset, but they all are. I 663 00:32:56,600 --> 00:32:59,040 Speaker 16: would just say the playing field for soccer, the fact 664 00:32:59,080 --> 00:33:01,280 Speaker 16: that there really isn't any way to you know, to 665 00:33:01,720 --> 00:33:04,840 Speaker 16: just cap with with with Middle East money that's come 666 00:33:04,840 --> 00:33:06,400 Speaker 16: into a lot of it. You know, it's just very, 667 00:33:06,480 --> 00:33:08,880 Speaker 16: very difficult to extract a profit and continue to pay 668 00:33:08,880 --> 00:33:12,400 Speaker 16: these players and compete for these salaries with with the 669 00:33:12,560 --> 00:33:14,880 Speaker 16: likes of you know, uh, you know, Man City and 670 00:33:14,880 --> 00:33:17,520 Speaker 16: some of the others who have really really deep pocketed investors. 671 00:33:17,560 --> 00:33:19,600 Speaker 16: And I think that's what's kind of skewing all the 672 00:33:19,640 --> 00:33:23,080 Speaker 16: revenue generation, all the valuation multiples to the downside. 673 00:33:23,080 --> 00:33:27,240 Speaker 6: In Europe any projection or outlook on the future of esports. 674 00:33:27,440 --> 00:33:30,920 Speaker 16: So, esports and sports betting are two of the biggest 675 00:33:30,960 --> 00:33:33,800 Speaker 16: drivers of our you know. So Bloomberg's created the Bloomberg 676 00:33:34,080 --> 00:33:36,560 Speaker 16: equal Weight Sports Basket, which is a way that your 677 00:33:36,600 --> 00:33:39,240 Speaker 16: average sort of investor can take advantage of any number 678 00:33:39,280 --> 00:33:41,760 Speaker 16: of publicly traded stocks that have, you know, exposure to 679 00:33:41,760 --> 00:33:44,240 Speaker 16: the sports industry. And Breed Dowerdies and her team have 680 00:33:44,320 --> 00:33:46,680 Speaker 16: done a great job of developing this and sports betting 681 00:33:46,680 --> 00:33:48,960 Speaker 16: and esports are wow, such a big part of it. 682 00:33:49,000 --> 00:33:51,320 Speaker 16: And esports, especially if you look at the purse from 683 00:33:51,360 --> 00:33:53,840 Speaker 16: like the I'm not an esports you know, expert here, 684 00:33:54,120 --> 00:33:56,280 Speaker 16: but but but Nathan n I do. My colleague in 685 00:33:56,280 --> 00:33:58,600 Speaker 16: Singapore is and he said that the purse from like 686 00:33:58,640 --> 00:34:01,600 Speaker 16: the World Championship of East Sports is on par or 687 00:34:01,680 --> 00:34:03,800 Speaker 16: higher than that of Wimbledon. I mean, can you imagine 688 00:34:03,840 --> 00:34:06,560 Speaker 16: higher than the Masters here here, I'm talking to golf here. 689 00:34:06,760 --> 00:34:09,239 Speaker 16: You know, it's just amazing how much money is being 690 00:34:09,280 --> 00:34:13,320 Speaker 16: funneled into that specific sort of subsector of the sports industry. 691 00:34:13,440 --> 00:34:16,040 Speaker 16: And it's growing. It's growing at a cager of like 692 00:34:16,080 --> 00:34:18,160 Speaker 16: double digits over the past five years, which is just 693 00:34:18,520 --> 00:34:20,560 Speaker 16: astronomical and I think there's more to come our. 694 00:34:20,480 --> 00:34:22,960 Speaker 2: Thanks to bi analysts and Business of Sports co host 695 00:34:23,000 --> 00:34:23,800 Speaker 2: Damian Sasaur. 696 00:34:24,160 --> 00:34:27,160 Speaker 4: This week, Bloomberg Business Week reported in their annual ranking 697 00:34:27,200 --> 00:34:30,480 Speaker 4: of full time MBA program that Stanford Graduate School of 698 00:34:30,520 --> 00:34:32,680 Speaker 4: Business is again number one. 699 00:34:32,800 --> 00:34:36,400 Speaker 2: Why Stanford host Scarlettfoo and guest host Stacy Vanick Smith 700 00:34:36,440 --> 00:34:40,239 Speaker 2: were joined by Demitra kesinid's Bloomberg News Senior. 701 00:34:40,040 --> 00:34:43,840 Speaker 17: Editor, Stanford came out top of our US rankings. We 702 00:34:43,880 --> 00:34:47,080 Speaker 17: have rankings across regions, so it's not globally the number 703 00:34:47,120 --> 00:34:51,279 Speaker 17: one school, just to clarify, but uh, you know, it 704 00:34:51,360 --> 00:34:56,880 Speaker 17: certainly points to resilience and strength of the programs. Stanford, 705 00:34:56,880 --> 00:34:59,520 Speaker 17: as we know in Silicon Valley, with all its focus 706 00:34:59,520 --> 00:35:03,759 Speaker 17: on technollogy and entrepreneurism and more, has been very, very 707 00:35:03,760 --> 00:35:06,840 Speaker 17: strong for years. You know that maybe to some degree 708 00:35:06,880 --> 00:35:09,280 Speaker 17: masks some of the problems that we see that especially 709 00:35:09,320 --> 00:35:12,239 Speaker 17: in the US, but globally, schools are confronting. I mean, 710 00:35:12,280 --> 00:35:17,040 Speaker 17: there are a lot of challenges today. There are geopolitical challenges, 711 00:35:17,400 --> 00:35:20,680 Speaker 17: there are challenges that are more specific to the US. 712 00:35:20,840 --> 00:35:24,040 Speaker 17: With what we've seen play out over several months, given 713 00:35:24,280 --> 00:35:30,279 Speaker 17: the current administration stance towards international students, towards issues of diversity. 714 00:35:30,560 --> 00:35:32,799 Speaker 17: So there are certainly a lot of things that are 715 00:35:32,800 --> 00:35:36,839 Speaker 17: just making tensions a little heightened right now and are 716 00:35:37,440 --> 00:35:41,080 Speaker 17: really raising the level of discussion and concern among deans 717 00:35:41,120 --> 00:35:44,000 Speaker 17: in a way that has them trying to come together 718 00:35:44,200 --> 00:35:46,560 Speaker 17: from around the world and really think about how do 719 00:35:46,600 --> 00:35:49,839 Speaker 17: we best support each other to support education, because what 720 00:35:49,880 --> 00:35:52,200 Speaker 17: we ultimately are in the business of is education. 721 00:35:53,120 --> 00:35:55,719 Speaker 13: Well, clearly some of those challenges have to do with 722 00:35:55,920 --> 00:35:59,440 Speaker 13: some of the some of the Trump administrations policies and 723 00:35:59,480 --> 00:36:04,359 Speaker 13: stances going after certain colleges and universities. How has that 724 00:36:04,480 --> 00:36:08,759 Speaker 13: factored in to business schools, to enrollment and to some 725 00:36:08,840 --> 00:36:11,920 Speaker 13: of the concerns that you're mentioning that deans of different 726 00:36:11,960 --> 00:36:12,960 Speaker 13: business schools are taking on. 727 00:36:13,280 --> 00:36:15,920 Speaker 17: I mean, it's starting very slowly, you know. It's not 728 00:36:16,120 --> 00:36:20,200 Speaker 17: as though we're seeing some great exodus from people interested 729 00:36:20,200 --> 00:36:22,600 Speaker 17: in schools in the US. We still have a very 730 00:36:22,640 --> 00:36:25,360 Speaker 17: strong system of business schools in this country, also in 731 00:36:25,400 --> 00:36:28,600 Speaker 17: Europe and in Asia, and there are very particular facets 732 00:36:28,640 --> 00:36:31,040 Speaker 17: to each of them that appeal to students depending on 733 00:36:31,080 --> 00:36:34,000 Speaker 17: what they're looking for. But I think that international students 734 00:36:34,040 --> 00:36:36,520 Speaker 17: who have come to this country in very large numbers 735 00:36:36,560 --> 00:36:39,960 Speaker 17: to business schools are starting to really question whether this 736 00:36:40,120 --> 00:36:44,440 Speaker 17: is the best option for them given the opportunities available elsewhere. 737 00:36:44,600 --> 00:36:46,520 Speaker 17: And part of that mix also has to do with 738 00:36:46,600 --> 00:36:49,839 Speaker 17: factors that aren't so specifically about the administration right now 739 00:36:49,840 --> 00:36:53,440 Speaker 17: in the US, but about jobs and opportunities and growth 740 00:36:54,320 --> 00:36:57,000 Speaker 17: are schools in the US. In addition to some of 741 00:36:57,040 --> 00:37:00,359 Speaker 17: the factors that they're facing that are more about some 742 00:37:00,400 --> 00:37:03,440 Speaker 17: of these issues around diversity and international students, they're also 743 00:37:03,480 --> 00:37:06,879 Speaker 17: confronting a situation in which, you know, more graduates are 744 00:37:06,920 --> 00:37:11,640 Speaker 17: finishing their programs with no job in hand. The share 745 00:37:11,680 --> 00:37:14,279 Speaker 17: of students that are finishing and that have a job 746 00:37:14,320 --> 00:37:17,840 Speaker 17: offer within three months. While it's not again a huge shift, 747 00:37:17,920 --> 00:37:20,440 Speaker 17: but it is a shift we're seeing, is really it's, 748 00:37:20,480 --> 00:37:23,160 Speaker 17: you know, that sort of percentage is being cut away. 749 00:37:23,560 --> 00:37:27,200 Speaker 17: We've seen so many cuts in technology, We've seen cuts 750 00:37:27,280 --> 00:37:30,200 Speaker 17: in many other industries that are leading. Consulting is really 751 00:37:30,239 --> 00:37:34,080 Speaker 17: a big one that draws business school students historically in 752 00:37:34,200 --> 00:37:37,680 Speaker 17: very large numbers. Consulting is going through a huge shift 753 00:37:37,760 --> 00:37:41,360 Speaker 17: right now, largely because of AI. We've seen many stories 754 00:37:41,360 --> 00:37:43,799 Speaker 17: about this, the way it affects the work that they're 755 00:37:43,800 --> 00:37:46,359 Speaker 17: doing the way that they're recruiting, how many people they 756 00:37:46,360 --> 00:37:50,040 Speaker 17: need to hire. So it's affecting all schools in various ways. 757 00:37:50,080 --> 00:37:53,239 Speaker 17: International programs have a lot of partnerships with US programs. 758 00:37:53,520 --> 00:37:56,600 Speaker 17: US programs send a lot of students abroad. The visa 759 00:37:56,640 --> 00:37:59,960 Speaker 17: issues are also, you know, very very touchy right now. 760 00:38:00,360 --> 00:38:03,920 Speaker 17: So it feels like it's on many fronts and just 761 00:38:04,000 --> 00:38:07,640 Speaker 17: coming together in a way that's more sort of pronounced. 762 00:38:07,440 --> 00:38:10,880 Speaker 4: And our thanks to demetri Kecndes, Bloomberg News Senior Editor. 763 00:38:11,120 --> 00:38:13,879 Speaker 2: That's this week's edition of Bloomberg Intelligence on Bloomberg Radio, 764 00:38:13,960 --> 00:38:16,360 Speaker 2: providing in depth research and data on two thousand companies 765 00:38:16,360 --> 00:38:17,720 Speaker 2: and one hundred and thirty industries. 766 00:38:17,840 --> 00:38:20,560 Speaker 4: And remember you can access Bloomberg Intelligence via bi Go 767 00:38:21,080 --> 00:38:24,120 Speaker 4: on the terminal. I'm Alexis Christophers and I'm Ball Sweeney. 768 00:38:24,280 --> 00:38:26,840 Speaker 2: Stay with us. Today's top stories and global business headlines 769 00:38:26,840 --> 00:38:29,240 Speaker 2: are coming up right now.