WEBVTT - Bloomberg Wall Street Week - September 13th, 2024 0:00:00.280 --> 0:00:04.720 This is Bloomberg Wall Street Week. The global push into infrastructure, 0:00:04.760 --> 0:00:08.480 breaking the IPO logjam in text, the financial stories that 0:00:08.560 --> 0:00:11.680 shape our world, cutting inflation without losing jobs. Do we 0:00:11.800 --> 0:00:14.440 need rate cuts? And if so? How many? Investing in 0:00:14.480 --> 0:00:17.079 a time of geopolitical turmoil. Through the eyes of the 0:00:17.120 --> 0:00:21.520 most influential voices. Ten Rogueff, economist of Harvard, former FDIC 0:00:21.680 --> 0:00:25.160 had Shila bet Ge CEO, Larry Coulp, San Francisco FED 0:00:25.160 --> 0:00:27.360 President Mary Daily Bloomberg. 0:00:26.840 --> 0:00:30.560 Wall Street Week with David Weston from Bloomberg Radio. 0:00:30.280 --> 0:00:35.080 A presidential debate, an historic commercial spacewalk, and Europe leads 0:00:35.120 --> 0:00:38.480 the way in rate cuts. This is Bloomberg Wall Street Week. 0:00:38.600 --> 0:00:43.199 I'm David Weston. This week, Devre Lair of Basselina on 0:00:43.200 --> 0:00:46.920 what's gone wrong with China for Sheer Sharma of Rockefeller 0:00:46.920 --> 0:00:49.600 International on what's gone wrong with housing prices in the 0:00:49.720 --> 0:00:52.760 United States? And Michael Wolf of Activate on what the 0:00:52.840 --> 0:01:09.399 explosion in online gambling means for the media world. We 0:01:09.520 --> 0:01:12.520 start with the upcoming election and what that means potentially 0:01:12.600 --> 0:01:15.039 for Global Wall Street and we're delighted to have with us. 0:01:15.040 --> 0:01:18.199 Blair Ephron. He is co founder of Centerview partners. Blair. 0:01:18.200 --> 0:01:20.160 Great to have you back with us on Wall Street Week. 0:01:20.280 --> 0:01:22.920 We had a debate this week which gave us some 0:01:22.959 --> 0:01:26.160 sort of a peek into the economic plans of Kamala Harris, 0:01:26.200 --> 0:01:28.400 the vice president on hand, the former president Donald Trump 0:01:28.480 --> 0:01:29.880 or together. What did we learn from it? 0:01:30.240 --> 0:01:31.280 So we learned a few things. 0:01:31.880 --> 0:01:34.840 We learned who Kamala Harris was on a broad basis, 0:01:35.080 --> 0:01:37.520 those who know her well and those non business community 0:01:38.080 --> 0:01:40.399 no she is. They expected her to do what she did, 0:01:40.480 --> 0:01:47.280 which was to be presidential, authoritative, approachable, well rounded on 0:01:47.319 --> 0:01:50.240 the issues, and disciplined. And I think it played as 0:01:50.240 --> 0:01:56.000 a big contrast obviously to form prisident Trump talking about 0:01:56.280 --> 0:02:00.680 dogs and the like. But most importantly I got an 0:02:00.720 --> 0:02:03.360 email immediately last night from a fortune we called S 0:02:03.360 --> 0:02:06.000 and P one hundred CEO who had met her but 0:02:06.080 --> 0:02:07.320 was on the fence, and. 0:02:07.240 --> 0:02:09.120 He said, boy, this is really just positive to me. 0:02:10.200 --> 0:02:12.440 She knows how to lead explorers. 0:02:12.440 --> 0:02:15.000 To talk about the plan specifically, I mean atmosphere is 0:02:15.040 --> 0:02:17.560 really counted election, as we know, but also it counts 0:02:17.600 --> 0:02:19.239 what these people plan to do. You are in a 0:02:19.280 --> 0:02:22.040 particular position to understand what the vice president might plan 0:02:22.160 --> 0:02:24.280 to do. An econoic policy. You work with her and 0:02:24.320 --> 0:02:26.960 her team fairly regularly, give us a sense of exactly 0:02:27.000 --> 0:02:28.720 how she would address the middle class, because that's the 0:02:28.760 --> 0:02:30.679 way she started a debate. I really care about the 0:02:30.680 --> 0:02:32.880 middle class. What is she proposing that would actually make 0:02:32.880 --> 0:02:34.720 a difference for the middle class on anybody? 0:02:35.360 --> 0:02:36.600 Four int one thousand or less. 0:02:36.800 --> 0:02:42.120 We'll actually see lower taxes. Two, if you're looking for 0:02:42.360 --> 0:02:44.960 a new home, we'll get a twenty five thousand dollars credit, 0:02:45.919 --> 0:02:48.200 and state and local communities will have incentives to build 0:02:48.240 --> 0:02:51.840 more quickly, cut through a red tape and make it 0:02:51.880 --> 0:02:52.560 more affordable. 0:02:53.480 --> 0:02:53.720 Three. 0:02:53.919 --> 0:02:55.359 She looks at the middle class and she says it's 0:02:55.400 --> 0:02:57.680 not enough for healthcare to have and sulend go down 0:02:57.720 --> 0:02:58.560 to thirty five dollars. 0:02:58.760 --> 0:03:01.400 You need lower health care costs more generally and. 0:03:01.440 --> 0:03:04.359 Very importantly, David, you start thinking about what she wants 0:03:04.400 --> 0:03:06.359 to do on the innovation economy. How do you help 0:03:06.400 --> 0:03:10.680 middle class families do well? You support them in building businesses. 0:03:10.680 --> 0:03:12.720 The idea that she wants to see twenty five million 0:03:13.040 --> 0:03:15.840 new applications during four years his. 0:03:15.800 --> 0:03:19.280 Presidency is a big deal. And she's raised the deductibility 0:03:19.320 --> 0:03:20.240 to fifty thousand dollars. 0:03:20.240 --> 0:03:24.200 In terms of expenses. She's making it so that if 0:03:24.240 --> 0:03:27.640 you have an idea, if you have an opportunity, she 0:03:27.680 --> 0:03:31.240 wants to help you most importantly. Also as importantly, she's 0:03:31.280 --> 0:03:35.520 looking at skills based jobs, not just college based jobs, 0:03:35.760 --> 0:03:37.800 and she wants to see a lot of private public 0:03:37.840 --> 0:03:42.000 partnership do that. And then in terms of the middle class, again, 0:03:42.480 --> 0:03:46.000 she's done nearly a trillion dollars of public private partnerships 0:03:46.000 --> 0:03:50.400 across the country, and that money is spent in communities, 0:03:50.400 --> 0:03:53.880 whether it's Chips up in Syracuseton, New York, Arizona, Ohio. 0:03:54.280 --> 0:03:57.120 Those are all creating great jobs or the middle class. 0:03:57.680 --> 0:03:59.720 There's no such thing as a free lunch. As you 0:03:59.720 --> 0:04:02.920 go through those programs, there are price tags, substantial price 0:04:02.960 --> 0:04:04.760 tags attached to each number one of them. How is 0:04:04.760 --> 0:04:06.040 she going to pay for it? If she can get 0:04:06.040 --> 0:04:06.400 them done? 0:04:06.480 --> 0:04:10.840 So, she is incredibly focused on fiscal discipline, but she's 0:04:11.320 --> 0:04:14.160 doing it in a way that is everybody pays their 0:04:14.160 --> 0:04:17.320 fair share, but not necessarily punitively. So the highest tax 0:04:17.360 --> 0:04:20.120 bracket goes to thirty nine point six percent. We've been 0:04:20.120 --> 0:04:23.560 there before. Cap gain is twenty eight percent. We've been 0:04:23.560 --> 0:04:27.680 there before. Ronald Reaguan's a twenty eight percent billionaire attacks. 0:04:27.720 --> 0:04:30.159 What she's telling you is she will figure out responsibly 0:04:30.600 --> 0:04:32.559 how billionaires pay their fair share. 0:04:32.720 --> 0:04:33.720 And I say responsibly. 0:04:33.800 --> 0:04:35.839 You have to pay attention to what she says about 0:04:35.839 --> 0:04:38.039 her plans versus what she doesn't say. 0:04:38.080 --> 0:04:38.760 And there's a lot in. 0:04:38.720 --> 0:04:44.000 The Biden Harris platform, like unrealized gains doesn't mean that's 0:04:44.000 --> 0:04:45.839 where the candidate is. She's going to look at everything 0:04:45.880 --> 0:04:47.680 and say, how can we raise that kind of revenue. 0:04:47.839 --> 0:04:48.799 She looks at buybacks. 0:04:48.920 --> 0:04:51.520 Right now stock buybacks are one percent. There has been 0:04:51.640 --> 0:04:54.719 zero difference in impact on buybacks. In fact, twenty twenty 0:04:54.720 --> 0:04:57.800 three was the largest amount of buybacks by companies ever. 0:04:58.200 --> 0:05:00.520 That goes from one percent to four percent. So she's 0:05:00.600 --> 0:05:03.200 highly focused on it. And she looks at the Trump 0:05:03.279 --> 0:05:07.000 plan and she says that's upwards between four trillion to 0:05:07.000 --> 0:05:10.400 five trillion have increased debt on top of the eight 0:05:10.400 --> 0:05:12.400 trillion of debt that was created during his first term. 0:05:12.520 --> 0:05:14.320 So she's very focused on the paid for. 0:05:14.360 --> 0:05:17.800 Us very So the people who would be paying more 0:05:17.839 --> 0:05:19.480 money are a lot of those people who are emailing 0:05:19.520 --> 0:05:22.200 you after the debates. They are in that top tax bracket. 0:05:22.240 --> 0:05:25.560 They're running companies will be affected. Why should Wall Street 0:05:25.600 --> 0:05:29.560 support Kamala Harris given her emphasis on the middle class 0:05:29.560 --> 0:05:31.720 and taking the money from some of the more wealthy. 0:05:31.880 --> 0:05:32.880 Okay, so let's. 0:05:34.279 --> 0:05:39.159 Put to bed something that people simply don't understand. The 0:05:39.240 --> 0:05:43.479 markets have done better under democratic presidencies over the past 0:05:43.520 --> 0:05:45.480 fifty years than Republican presidencies. 0:05:45.880 --> 0:05:47.040 The third year of Divide. 0:05:46.839 --> 0:05:49.560 Administration, which means no COVID impact versus the third year 0:05:49.560 --> 0:05:54.200 of the Trump administration, which means no COVID impact, higher GDP, more. 0:05:54.080 --> 0:05:55.920 Jobs, better market performance. 0:05:56.839 --> 0:06:03.280 The CEO he or she wants stability, wants a free 0:06:03.360 --> 0:06:05.640 market based economy, does not want to be sitting here 0:06:05.640 --> 0:06:08.839 with ten and twenty percent tariffs across the board, which 0:06:08.880 --> 0:06:12.240 is upwards of one percent hit. 0:06:12.120 --> 0:06:13.839 To GDP seven hundred thousand jobs. 0:06:14.440 --> 0:06:18.520 They want support from the public sector in a way 0:06:18.560 --> 0:06:20.599 that helps their business. If they know what the certain 0:06:21.160 --> 0:06:23.000 with certainty, what the environments will look. 0:06:22.920 --> 0:06:24.120 Like, it helps them. 0:06:24.560 --> 0:06:29.640 And I also do think the signally matters. When the 0:06:29.720 --> 0:06:35.200 VP talks about business, she talks about small business, which 0:06:35.200 --> 0:06:36.960 has been a big focus of hers for a long time. 0:06:37.360 --> 0:06:40.680 She talks about the entrepreneurial business, the startup community, and 0:06:40.720 --> 0:06:42.960 she talks about big business that we're all in here together, 0:06:43.360 --> 0:06:45.600 aligned to figure out how to grow the economy for 0:06:45.760 --> 0:06:49.039 broad based growth again back to the middle class. 0:06:49.040 --> 0:06:51.800 And I think most CEOs understand that Blair take us 0:06:51.800 --> 0:06:54.080 through your business at least the way I think the 0:06:54.080 --> 0:06:56.840 business of deals. When you've been on before, you've predicted 0:06:56.839 --> 0:06:59.080 that actually this year we'd start to see those deals 0:06:59.120 --> 0:07:03.000 come back after all sort of a quass period. Are 0:07:03.040 --> 0:07:03.520 we seeing it? 0:07:04.160 --> 0:07:06.280 So it has come back a bit, and not just 0:07:06.320 --> 0:07:07.200 deals but. 0:07:08.800 --> 0:07:12.559 Financings as well, but it is by no means where 0:07:12.600 --> 0:07:14.760 it will be. I think in twenty five there's still 0:07:14.760 --> 0:07:18.760 been a lot of uncertainty for my world in terms 0:07:18.800 --> 0:07:23.480 of the interest rate environment, in terms of the election 0:07:23.720 --> 0:07:26.240 and what that would lead to things. Always the last quarter, 0:07:26.720 --> 0:07:30.000 the last six months before an election always people settled 0:07:30.000 --> 0:07:33.240 down and want to see what's going to happen, momentum 0:07:33.240 --> 0:07:38.760 in the economy and rerogatory aspects. So it's it has 0:07:38.840 --> 0:07:43.520 been a market where companies are still highly focused on 0:07:43.600 --> 0:07:46.400 M and A, but I would say more highly focused 0:07:46.440 --> 0:07:49.040 David on M and A that is more tactical rather 0:07:49.120 --> 0:07:53.360 than large ten billion, twenty billion above transformational. I think 0:07:53.400 --> 0:07:55.640 what you need for that which I do believe will 0:07:55.640 --> 0:08:00.400 be coming. Is one interest rates to come down. Remember 0:08:00.440 --> 0:08:04.240 the last four cycles we've had interest rate declines after 0:08:04.280 --> 0:08:08.120 the first interest rate cut, growth has been on average 0:08:08.200 --> 0:08:11.320 three percent GDP. The markets on average have been up 0:08:11.360 --> 0:08:14.480 twenty percent. It becomes a tailwind. It is less relevant 0:08:14.560 --> 0:08:17.360 whether rates come down over eighteen months under fifty basis 0:08:17.400 --> 0:08:21.080 points versus one hundred. It's the trend, and it encourages 0:08:22.160 --> 0:08:25.600 an investment from companies, whether it's in their own business, 0:08:25.640 --> 0:08:28.800 making ten year bets or buying a business. And they 0:08:28.840 --> 0:08:32.160 believe that they're in the right part of the curve, 0:08:32.480 --> 0:08:35.720 they are more willing to make strategic ten year bets 0:08:35.720 --> 0:08:37.240 in their investment. So I see I think you'll see 0:08:37.240 --> 0:08:41.160 a lot of that. I think you'll also see a 0:08:41.160 --> 0:08:45.040 lot of pent up demand for financings, and I would 0:08:45.040 --> 0:08:49.320 expect that the markets both on equity and debt, but 0:08:49.320 --> 0:08:51.079 particularly on equity would. 0:08:50.920 --> 0:08:51.719 Open up quite a bit. 0:08:51.960 --> 0:08:56.520 That gives companies currency and that matters. Then finally, I 0:08:56.520 --> 0:09:00.559 think you see a balance between price EXTI between a 0:09:00.600 --> 0:09:03.520 buyer and a seller much more not in line now 0:09:04.120 --> 0:09:06.480 than they work perhaps in the beginning of twenty twenty four. 0:09:06.720 --> 0:09:09.559 Take us through that interest rate analysis, more debate about 0:09:09.640 --> 0:09:12.839 where does the FED end up? How important is that 0:09:12.920 --> 0:09:14.600 in making decisions about making deals? 0:09:14.880 --> 0:09:15.480 Great question. 0:09:15.559 --> 0:09:18.680 I think it is so much less important than people 0:09:18.720 --> 0:09:19.400 ascribe to it. 0:09:20.720 --> 0:09:22.080 The CEO doesn't look. 0:09:22.400 --> 0:09:25.200 At his or her balance sheet and says, wow, if 0:09:25.240 --> 0:09:27.680 I can finance it three and a half percent versus 0:09:27.679 --> 0:09:31.840 three seventy five percent, I'll do the transaction. You're making 0:09:31.920 --> 0:09:36.880 a long term strategic decision. Therefore, what you're trying to 0:09:36.880 --> 0:09:40.800 do is say what will long term the impact of 0:09:40.840 --> 0:09:42.600 the economy, of the impact of the rate environment mean 0:09:42.679 --> 0:09:46.840 to me? And when you see the curb decline, it 0:09:46.880 --> 0:09:53.679 increases confidence, increases optimism, And that's the difference. I'm always 0:09:53.720 --> 0:09:56.400 struck by how people are focused on what will happen 0:09:56.440 --> 0:09:59.560 over the next three months and determining how they want 0:09:59.600 --> 0:10:03.640 to make tre I understand for certain traders great, but 0:10:03.720 --> 0:10:07.520 for my world, where you're talking about businesses, talking about companies, 0:10:07.920 --> 0:10:09.880 they just don't have that mindset. They're looking at the 0:10:09.960 --> 0:10:13.960 overall economic picture generally, of which the rate environment is 0:10:13.960 --> 0:10:14.600 one part of it. 0:10:15.320 --> 0:10:17.480 If there is a pent up demand for deals that's 0:10:17.520 --> 0:10:20.080 sort of being held off for both when the FED 0:10:20.120 --> 0:10:23.000 starts really cutting and where it's going. And for the elections, 0:10:23.360 --> 0:10:25.880 where do you see particular demand that is pent up? 0:10:26.000 --> 0:10:28.360 I mean, where are there transformationional areas? I mean, certainly 0:10:28.400 --> 0:10:30.400 we cover media a lot, for example, there's a lot 0:10:30.400 --> 0:10:32.679 in tech. Where do you see sectors that particularly might 0:10:32.679 --> 0:10:33.600 be ripe for deals? 0:10:33.920 --> 0:10:36.240 So I think actually most sectors. There's been in most 0:10:36.280 --> 0:10:39.920 of these sectors, David, a couple of big deals already. 0:10:39.960 --> 0:10:43.400 So talk about media. You know, Paramount obviously a big deal. 0:10:44.520 --> 0:10:48.319 It's a sector that is entirely under disruption. You should 0:10:48.360 --> 0:10:52.200 assume we will see more consumer you already saw a 0:10:52.200 --> 0:10:55.800 big deal klean over Mars. I assume that will lead 0:10:55.880 --> 0:10:57.760 other companies to think about what they want to do 0:10:58.320 --> 0:11:02.280 tech in there have Finally, I think a calibration and 0:11:02.360 --> 0:11:05.559 equalization between buyer expectations and seller expectation. 0:11:05.679 --> 0:11:07.280 You'll see more there healthcare. 0:11:07.360 --> 0:11:09.880 Healthcare has been busy throughout, no reason to think it 0:11:09.920 --> 0:11:14.160 won't continue to be busy. So I would actually argue 0:11:14.640 --> 0:11:18.240 it's not going to be from my perspective, just one 0:11:18.320 --> 0:11:20.800 or two sectors. I think there'll be a general lifting 0:11:20.840 --> 0:11:24.160 of the market. And to me that means a good 0:11:24.200 --> 0:11:26.439 market in our world now is five trillion or above, 0:11:26.840 --> 0:11:28.760 But a perfectly fine market is three and a half 0:11:28.800 --> 0:11:31.520 trillion to four trillion. It's hard to imagine that we 0:11:31.520 --> 0:11:34.199 don't have at least a perfectly fine market in twenty 0:11:34.200 --> 0:11:34.720 twenty five. 0:11:35.240 --> 0:11:37.680 Has the deal area been held back a bit by 0:11:37.880 --> 0:11:40.200 private equity? Is that less of a factor for you 0:11:40.240 --> 0:11:42.280 than it was a year or five years ago. 0:11:42.640 --> 0:11:45.080 Absolutely. I think the private equity community. 0:11:46.360 --> 0:11:48.400 Is thirty five to forty percent of the overall market 0:11:49.240 --> 0:11:49.880 in a good year. 0:11:50.320 --> 0:11:52.839 I'd be surprised if in twenty twenty five you. 0:11:52.800 --> 0:11:56.240 Don't see that part of the market being very active, very. 0:11:56.280 --> 0:12:01.400 Robust, and corporation's stepping into that to do their own deals. 0:12:01.440 --> 0:12:03.720 Well, not so oparations are doing already. 0:12:03.760 --> 0:12:06.240 Mostly you're seeing a lot of corporate activity already, and 0:12:06.360 --> 0:12:09.160 I don't in any way think that's going to slow down. Remember, 0:12:09.320 --> 0:12:11.880 the market ps are down two and a half points 0:12:12.120 --> 0:12:15.440 from the peak a couple of years ago, and earnings 0:12:15.440 --> 0:12:17.920 are still pretty good SMP five hundred earnings for this 0:12:18.000 --> 0:12:20.839 year and for the next quarter, we'll again eighty percent 0:12:20.840 --> 0:12:23.960 of the companies will all perform estimates. CEOs feel this 0:12:24.040 --> 0:12:28.000 kind of tailwind, and my bet is that they will 0:12:28.000 --> 0:12:28.720 invest against it. 0:12:28.960 --> 0:12:30.960 Blair It's always great to have you on Wilsherbeg. Thank 0:12:31.000 --> 0:12:33.960 you so much. Let's Blair e Fron of Centerview Partners 0:12:35.920 --> 0:12:39.400 coming up. Football ratings are up and so is online 0:12:39.480 --> 0:12:42.760 betting on the games. Are the two related? We ask 0:12:42.840 --> 0:12:47.200 Michael Wolf of Activating. That's next on Wall Street Week 0:12:47.320 --> 0:12:48.119 on Bloomberg. 0:12:49.640 --> 0:12:53.880 This is Bloomberg Wall Street Week with David Weston from 0:12:54.000 --> 0:12:56.640 Bloomberg Radio. 0:13:01.520 --> 0:13:04.040 This is Wall Street Week. I'm David Weston. The NFL 0:13:04.120 --> 0:13:07.320 season is now underway, which means a whole new season 0:13:07.440 --> 0:13:09.920 of sports betting, at least for some fans. To take 0:13:10.000 --> 0:13:12.520 us through this explosion and what it means for the 0:13:12.559 --> 0:13:16.160 media of sports, we welcome back now Michael Wolf. He's Activated, 0:13:16.200 --> 0:13:18.960 founder and CEO. Michael, always great to have you. Let's 0:13:19.000 --> 0:13:21.440 talk about this sports betting, boy, it is everywhere. 0:13:22.160 --> 0:13:24.560 I mean, if you look at overall in the US 0:13:24.720 --> 0:13:27.400 we have where this year we're going to have about 0:13:27.400 --> 0:13:31.400 one hundred and forty billion in legalized sports betting that 0:13:31.679 --> 0:13:34.120 we forecast that within three years this is going to 0:13:34.120 --> 0:13:35.120 be a two hundred billion. 0:13:35.480 --> 0:13:36.880 But here's where the prize is. 0:13:37.000 --> 0:13:40.920 There's five hundred billion of sports betting in the US 0:13:41.240 --> 0:13:43.760 that is not legal. So what we're about to see 0:13:43.880 --> 0:13:49.600 is the transition from illicit to legal, and so it's 0:13:49.640 --> 0:13:52.640 like going from your bookie to bet MGM and DraftKings, 0:13:53.600 --> 0:13:55.120 and that's what's going to explode. 0:13:55.200 --> 0:13:55.400 Now. 0:13:55.640 --> 0:14:00.480 The numbers for the NFL twenty three billion last year 0:14:00.520 --> 0:14:05.240 in sports betting, thirty five billion this year, but almost 0:14:05.280 --> 0:14:07.920 twenty six percent of that is one day the Super Bowl. 0:14:08.559 --> 0:14:11.120 Wow, that's amazing. So there's a lot of upside at 0:14:11.160 --> 0:14:13.559 least for somebody, maybe not for the bookies, but upside 0:14:13.600 --> 0:14:17.600 for somebody Besides the DraftKings and the MGM sports who 0:14:17.640 --> 0:14:18.680 else benefits from this? 0:14:19.280 --> 0:14:24.160 For example, the leagues, well, the league's the NFL has 0:14:24.200 --> 0:14:26.720 made about a billion dollars worth of deals with these 0:14:27.040 --> 0:14:29.880 with all of the sports betting companies partnerships. But at 0:14:29.920 --> 0:14:34.120 the same time, those sports betting companies are spending about 0:14:34.120 --> 0:14:38.120 the same amount, about a billion dollars on advertising across 0:14:38.160 --> 0:14:41.520 television and digital and other places. And so it's providing 0:14:41.560 --> 0:14:43.800 a big, big boost to media companies. 0:14:44.280 --> 0:14:45.680 And part of what's going. 0:14:45.640 --> 0:14:48.840 To change is a lot of what's driven the growth 0:14:49.000 --> 0:14:51.680 is the number of states that have legalized sports betting. 0:14:51.800 --> 0:14:55.880 So we're about thirty nine states, so far, there's only 0:14:55.960 --> 0:14:59.400 a couple that came online last year of Florida, Kentucky 0:14:59.360 --> 0:15:02.800 and other places. It's not clear that there's going to 0:15:02.800 --> 0:15:05.480 be anymore. So this is going to be about moving 0:15:05.520 --> 0:15:08.720 that five hundred billion into that core sports betting. 0:15:09.160 --> 0:15:11.480 Talk to us about what this means in streaming, because 0:15:11.480 --> 0:15:13.880 that is the future obviously of the media companies that 0:15:13.920 --> 0:15:15.920 are all trying to get there, trying to be profitable 0:15:15.960 --> 0:15:19.560 even more than get there. How essential is sports to 0:15:19.600 --> 0:15:20.600 a streaming strategy. 0:15:20.920 --> 0:15:24.560 If we look at the top the top shows overall 0:15:24.600 --> 0:15:28.800 on television, they're pretty much all sports and depending on 0:15:28.840 --> 0:15:31.360 the time of the year, pretty much all NFL with 0:15:31.520 --> 0:15:35.359 a couple of things like wrestling in the meantime. 0:15:35.720 --> 0:15:37.840 But if you look going forward. 0:15:37.920 --> 0:15:41.240 You can get the NFL on practically over the top 0:15:41.320 --> 0:15:45.400 outside of television on streaming services only a very small 0:15:45.440 --> 0:15:48.120 percentage of the games you're only going to be on television. 0:15:48.960 --> 0:15:51.000 So what does that mean again for the leagues, because 0:15:51.040 --> 0:15:52.880 it's good news for them if they have more bidders, 0:15:53.040 --> 0:15:55.360 and every time I turn around there's an Amazon bidding 0:15:55.520 --> 0:15:57.840 or an Apple bidding, Well we're. 0:15:57.480 --> 0:15:59.240 About to see if you just look at the recent 0:15:59.440 --> 0:16:04.200 NBA where the NBA was able to sell their games 0:16:04.320 --> 0:16:09.120 pretty much across the board, whether it was Amazon or Disney. 0:16:09.280 --> 0:16:10.400 We're going to see more of that. 0:16:10.440 --> 0:16:15.280 These rights become extraordinarily valuable in a world where this 0:16:15.360 --> 0:16:18.440 is what's getting people to go into these streaming services 0:16:18.480 --> 0:16:20.119 and getting them to watch television. 0:16:20.680 --> 0:16:23.000 So what does this mean for a company like Paramount. 0:16:23.000 --> 0:16:24.840 We now know since we last talked, we know for 0:16:24.880 --> 0:16:27.800 sure what you predicted, which is that mister Ellison actually 0:16:27.880 --> 0:16:28.720 is going to run the place. 0:16:29.440 --> 0:16:30.840 Well, it's fascinating. 0:16:30.920 --> 0:16:33.800 Mister Ellison is going to run it, but he's bringing 0:16:33.800 --> 0:16:38.480 in Jeff Schell, who ran NBC, really understands people don't realize. 0:16:38.480 --> 0:16:42.000 He understands both the studio side of the business and 0:16:42.280 --> 0:16:46.960 the network side, including the sports and the streaming business 0:16:47.000 --> 0:16:51.240 through Peacock. So I would expect bringing in the new 0:16:51.280 --> 0:16:55.680 management team would make a huge difference. To a large extent, 0:16:56.200 --> 0:16:59.520 this company has really suffered from a lack of investment 0:17:00.120 --> 0:17:02.479 and a lack of creative leadership. 0:17:03.680 --> 0:17:06.160 Are they going to keep it all together? Would you expect? 0:17:06.240 --> 0:17:08.000 Or are we going to have sort of if you will, 0:17:08.160 --> 0:17:11.399 good company, bad company, the streaming and the studio on 0:17:11.440 --> 0:17:13.960 the one hand, good company maybe some of the traditional 0:17:14.000 --> 0:17:15.440 linear media not so good. 0:17:15.520 --> 0:17:18.399 Well, here's the challenge. Most of these media companies still 0:17:18.480 --> 0:17:22.760 make most of their money on linear, and the studios 0:17:23.080 --> 0:17:26.760 and the streaming services for the moment aren't going to 0:17:26.800 --> 0:17:29.240 make really make a lot of money. But each of 0:17:29.320 --> 0:17:33.280 these networks, and the TV stations and the broadcast networks, 0:17:33.480 --> 0:17:35.800 they have to learn to manage in a world where 0:17:35.840 --> 0:17:39.480 there are fifty million cable subscribers. Just a few years ago, 0:17:40.000 --> 0:17:42.439 we were at one hundred million homes in the US. 0:17:42.520 --> 0:17:46.000 Practically every home in the US had some sort of 0:17:46.080 --> 0:17:51.600 cable or satellite. Now our firm is forecasting that we're 0:17:51.600 --> 0:17:55.320 going to go from seventy million homes around now to 0:17:55.480 --> 0:17:57.479 within three years fifty million homes. 0:17:57.640 --> 0:17:59.840 They're all going to learn how to manage against that. 0:18:00.160 --> 0:18:03.200 But still there's a lot of upside through these assets. 0:18:03.200 --> 0:18:06.880 Well, a lot fewer cable basic cable husholds, a lot 0:18:06.920 --> 0:18:10.359 more streaming husholes. I saw a report on Bloomberg actually 0:18:10.400 --> 0:18:12.560 that said that actually, the good news is streaming now 0:18:12.600 --> 0:18:15.439 makes money. The bad news is Netflix makes more than 0:18:15.480 --> 0:18:17.920 one hundred percent of the money because the other guys 0:18:17.920 --> 0:18:19.560 are losing, but Netflix is making up for all the 0:18:19.600 --> 0:18:20.159 other losses. 0:18:20.440 --> 0:18:23.000 You know, if you look back in the history of media, 0:18:23.359 --> 0:18:26.200 all of the cable networks lost money for their first 0:18:26.240 --> 0:18:28.399 five or six years, and then they all started to 0:18:28.440 --> 0:18:31.800 make money. We're just seeing a lot of competition. And 0:18:31.920 --> 0:18:34.520 as much as they say they're going to reduce the 0:18:34.560 --> 0:18:38.919 amount that they're spending on programming, it's a little deceptive 0:18:38.960 --> 0:18:41.479 because they'll put that programming on their balance sheets. 0:18:41.560 --> 0:18:43.080 They all have to keep spending. 0:18:43.119 --> 0:18:45.040 They all have to spend to keep up with Netflix, 0:18:45.080 --> 0:18:46.840 and they a of have to spend to keep up 0:18:46.880 --> 0:18:50.359 with Amazon Prime. Prime video is also taking a lot 0:18:50.440 --> 0:18:53.600 of people's viewing time, especially as they start to ad sports. 0:18:53.840 --> 0:18:55.720 Thank you so much, Michael. Always a treat to have 0:18:55.760 --> 0:19:00.720 you here. That is Michael Wolf of Activate Come Back Now. 0:19:00.800 --> 0:19:04.199 Rushir Sharma. He is the chairman of Rockefeller International and 0:19:04.320 --> 0:19:07.760 author most recently What Went Wrong with Capitalism? Roushure. Always 0:19:07.760 --> 0:19:08.880 great to have you on the program. 0:19:08.960 --> 0:19:11.040 I say you have a columna in. 0:19:10.920 --> 0:19:14.119 The Financial Times this week about affordable housing, which has 0:19:14.160 --> 0:19:17.680 become a center point in this presidential campaign, with both 0:19:17.720 --> 0:19:20.639 sides trying to address sort of the real plight of 0:19:20.680 --> 0:19:21.640 people trying to buy house. 0:19:21.840 --> 0:19:24.119 What's the problem, Well, I think that if you look 0:19:24.160 --> 0:19:27.359 at what went wrong with capitalism, the single biggest issue 0:19:27.359 --> 0:19:29.960 for me is the fact that the average American can't 0:19:30.000 --> 0:19:32.280 afford to buy a home, and so you have this 0:19:32.359 --> 0:19:35.840 flight today where more than half of the twenty year 0:19:35.840 --> 0:19:39.160 olds in our country are living in with their parents 0:19:39.359 --> 0:19:41.360 because it's too hard for them to go out and 0:19:41.800 --> 0:19:45.359 buy their own home. We've had this incredible appreciation in 0:19:45.440 --> 0:19:49.240 home prices that's happened over the last few decades. In fact, 0:19:49.240 --> 0:19:52.920 home prices in real terms in America are up more 0:19:52.960 --> 0:19:55.800 than any other developed country that I really know off 0:19:55.800 --> 0:20:01.760 of significance. And it's the home prices have tripled while 0:20:02.480 --> 0:20:04.919 this century, while incomes have only doubled. 0:20:04.960 --> 0:20:06.120 So you have a real. 0:20:05.920 --> 0:20:08.480 Sort of affordability issue out here. 0:20:08.600 --> 0:20:09.640 Why has this happened? 0:20:09.680 --> 0:20:10.360 And this is what the. 0:20:10.320 --> 0:20:13.199 Column tries to address, that we have people sort of 0:20:13.200 --> 0:20:17.240 offering all these solutions about rent controls, price controls. The 0:20:17.320 --> 0:20:19.720 real problem with the housing market is the fact that 0:20:19.760 --> 0:20:23.639