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

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Speaker 2: What if Matt and I talked super fast, but then

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Speaker 2: you slowed it down to make the podcast longer.

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Speaker 1: You could pitch me down, so I sounded like this. God,

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Speaker 1: wouldn't that be good?

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Speaker 2: You sound like a fancy man.

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Speaker 1: I am a fancy man.

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Speaker 2: Wow.

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Speaker 1: Hello, and welcome to The Money Stuff Podcast. You're a

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Speaker 1: weekly podcast where we talk about stuff related to money.

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Speaker 1: I'm Matt Levin and I write The Money Stuff colmed

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Speaker 1: for Blueberg Opinion.

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Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and

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Speaker 2: an anchor for Bloomberg Television.

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Speaker 1: What are we talking about today, Katie?

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Speaker 2: We're going to talk about wrestling and fighting, and we're

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Speaker 2: going to talk about private credit ETF liquidity I frequently

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Speaker 2: visited topic on this podcast. And then we're going to

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Speaker 2: talk about the mirage of the American Dream. Yes, exactly,

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Speaker 2: So let's go right into it. This is complicated. We're

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Speaker 2: talking about Endeavor, we're talking about TKL, we're talking about

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Speaker 2: Silver Lake. Can you explain first all the ownership structure

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Speaker 2: of what we're talking about?

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Speaker 1: Okay, So Endeavor is like a talent agency slash media behemoth.

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Speaker 1: It's like Ari Emmanuel's talent Agency that became a giant thing.

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Speaker 1: And one reason it's a giant thing is that it

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Speaker 1: owned WWE World Wrestling Entertainment, which then merged with UFC

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Speaker 1: the Ultimate Fighting Championship to form a giant fighting complex.

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Speaker 1: And that fighting complex is called TKO is the name

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Speaker 1: of the company, and it's now a public company, and

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Speaker 1: Davor owns a little more than half of it, And

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Speaker 1: so Endeavor is a company that owns a little bit

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Speaker 1: more than half of another company. They're both public. Endeavor's public.

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Speaker 1: TKO as public, Endeavor is like seventy percent owned by

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Speaker 1: silver Lake, the private equity firm. Right, silver Lake has

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Speaker 1: this ladder. It wants to take Endeavor private. Let's buy

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Speaker 1: the shares that it doesn't already own, and it negotiated

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Speaker 1: a merger with the board of directors and it agreed

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Speaker 1: to pay twenty seven to fifty per share for the

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Speaker 1: remainder of Endeavor. That happened like a year ago. It's

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Speaker 1: they're working to get closing. And what has happened in

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Speaker 1: the interim is that the stock price of TKO has

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Speaker 1: gone way out. So what that means is that in

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Speaker 1: Deeva runs more than half of TKO has become a

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Speaker 1: lot more valuable. That means that Endeavor has become a

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Speaker 1: lot more valuable, or you would think that would be

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Speaker 1: the case. And so all the shareholders of Endeavor who

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Speaker 1: are not silver Lake say, well, you agreed to pay

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Speaker 1: twenty seven to fifty a year ago. The company is

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Speaker 1: more valuable. Now we want more money. Silver Like I

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Speaker 1: said no, they agreed to the deal twenty seven to fifteen.

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Speaker 1: That's what we're doing. And the shareholders are revolting. They're

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Speaker 1: saying they're going to demand appraisal, which is like in Delaware,

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Speaker 1: if you don't like a merger price, you can go

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Speaker 1: to a judge and say this was an unfair, too

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Speaker 1: low price. I'd like more, and the judge can say yes,

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Speaker 1: here you go. In recent years, it has been tough

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Speaker 1: to win appraisal cases because usually the judges are like no,

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Speaker 1: for complicated reasons you can get into. But here it's

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Speaker 1: an unusually easy case because they're like, look, most of

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Speaker 1: this company's asked are this public company. The shares have

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Speaker 1: gone up, so we know it's worth more than the

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Speaker 1: great deal, so you should give us more money.

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Speaker 2: I have two questions here one is that I mean,

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Speaker 2: you write and you just said that it used to

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Speaker 2: be easier to win appraisal crisis. You wrote that it

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Speaker 2: changed in twenty seventeen, which seems I can't like, I

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Speaker 2: can't think of a catalyst, like why did it change

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Speaker 2: in twenty seventeen.

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Speaker 1: There's kind of two points here. So one is like

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Speaker 1: Delaware judges or experts in corporate law and banking and

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Speaker 1: mergers and see themselves as being expert in like knowing

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Speaker 1: how companies work. And so it used to be you'd

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Speaker 1: go to a Dellary judge and say this company is

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Speaker 1: worth more than the acquirer paid for it, and you'd

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Speaker 1: present like your discattered cash flow model, and the acquirer

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Speaker 1: would present their model, and there'd be an argument, and

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Speaker 1: the judge would think about all of this and be like,

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Speaker 1: you're right, it's worth more. And people got kind of

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Speaker 1: annoyed with that and said, why should a judge get

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Speaker 1: to decide what the company is worth? And what happened

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Speaker 1: is that, like twenty seventeen is like the turning point

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Speaker 1: people point to you because it's a big case. The

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Speaker 1: dell by a like Michael Debob Dell a judge said no,

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Speaker 1: he underpaid for it, and he orded more money. And

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Speaker 1: then the Delaware Supreme Court reversed that on appeal and said, basically,

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Speaker 1: like you should give more weight to objective facts, like

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Speaker 1: the company ran a merger process and the highest bid

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Speaker 1: was what it got right, or the company's stock trades

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Speaker 1: in the market and you can sort of look at

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Speaker 1: the stock price and say that's a pretty good indicator

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Speaker 1: of what the company is worth. So basically since Dell,

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Speaker 1: there's been less of an emphasis on Delaware judges listening

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Speaker 1: to arguments about what a company is worth and like

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Speaker 1: making their own decision, and more of an emphasis on like,

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Speaker 1: what the market says the company is worth is like,

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Speaker 1: most of the time pretty good evidence. So it's not

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Speaker 1: like you can never have appraise anymore. It's like it's

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Speaker 1: just like a little bit like a higher bar to

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Speaker 1: prove that the company is worth something other than what

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Speaker 1: the market says it's worth or what the merger says

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Speaker 1: it's worth. And that's what makes this case unusual because

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Speaker 1: here the disgruntled shareholders aren't saying, oh, we want you

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Speaker 1: to take our evidence of value rather than the market's

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Speaker 1: evidence of value, saying no, no, like the market price says

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Speaker 1: this company is worth more than then silver Lake is

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Speaker 1: paying for it. Yeah, and silver Lake is the one saying, no,

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Speaker 1: the market price is fake.

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Speaker 2: Well do you say that this is a pretty straightforward

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Speaker 2: case of appraisal. But couldn't you make the case that

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Speaker 2: silver Lake just made a good deal here that they

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Speaker 2: saw that this company is It doesn't matter.

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Speaker 1: That doesn't matter, Like, yes, absolutely in the ordinary course

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Speaker 1: of things, Like they agreed this deal. If you're like, Okay,

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Speaker 1: you agreed on a deal a year ago, and since

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Speaker 1: then the market has gone up, you should get the

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Speaker 1: benefit of yeah, and like, right, as a matter of

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Speaker 1: like merger practice, endeavor shouldn't be able to back out

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Speaker 1: of the deal now because the market went up, right, Yeah,

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Speaker 1: But that's not how appraisal works. Like appraisal is just

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Speaker 1: like a thing in the law, and the thing says,

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Speaker 1: you know, the shareholders are entitled to the fair value

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Speaker 1: of the company at the time of the closing of

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Speaker 1: the merger, so like technically they're entitled to this.

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Speaker 2: Okay.

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Speaker 1: It's just like this is like a weird element of

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Speaker 1: law that people like not to think that much about.

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Speaker 1: Like the difference between signing and closing but here the

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Speaker 1: company has gone up a lot between.

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Speaker 2: Signing, and actually it's gone up so much that I

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Speaker 2: did some reporting for this podcast. Usually I just show up,

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Speaker 2: but in this case, I asked KEITHA. Rong Goanathan of

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Speaker 2: Bloomberg Intelligence basically, why have TKA's shares gone up so

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Speaker 2: much since Endeavor agreed to that deal with silver Lake

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Speaker 2: It was in April twenty twenty four. Her answer was,

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Speaker 2: they have a big UFC media rights deal with Disney

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Speaker 2: that is expiring at the end of twenty twenty five.

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Speaker 2: There's reports that are suggesting that they're asking for a

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Speaker 2: doubling of yearly fees to a billion dollars, which would

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Speaker 2: be substantial. There's also a little bit of a Trump effect,

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Speaker 2: not to sure gaft.

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Speaker 1: You know, it seems like the sort of thing that

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Speaker 1: would thrive.

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Speaker 2: Yeah, he's shown up at wrestling matches. I thought that

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Speaker 2: was a little bit interesting because there's no one closer

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Speaker 2: to Donald Trump right now than Elon Musk, and Elon

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Speaker 2: Musk obviously has had the opposite experience in the public markets,

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Speaker 2: at least with Tesla.

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Speaker 1: Yeah, right, it's interesting, Like you think about like the

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Speaker 1: stereotypical Tesla buyer from three years ago, and how they

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Speaker 1: would feel about it. I mus, then you think about

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Speaker 1: like the stereotypical wrestling thing. Yeah, that's a slightly different.

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Speaker 2: Demographic, that's true, it's totally different markets. I just think

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Speaker 2: about that too. We had Carson Block on Bloomberg Television.

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Speaker 2: This is a non sequitor. We had him on television

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Speaker 2: this week and I asked him, would you bet against Tesla?

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Speaker 2: It's gone down a ton You said a month ago

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Speaker 2: that you wouldn't And he said.

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Speaker 3: Is he doing irreparable damage to the Tesla brand? I

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Speaker 3: mean maybe, But again, this guy, for years and years

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Speaker 3: and years has done nothing but pull rabbits out of

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Speaker 3: the hat.

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Speaker 2: So we'll see how long this Tesla draw down continues.

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Speaker 4: But so, how does.

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Speaker 2: This end up? This Endeavor Silverlake deal? You wrote that

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Speaker 2: it closes in the next two weeks or so. Hasn't

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Speaker 2: appraisal case actually materialized yet?

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Speaker 1: No, No, you have to wait until they closes. There's

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Speaker 1: a lot of technical requirements, one of which is that

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Speaker 1: in this case, you need to have held your shares

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Speaker 1: continuously from February fourth. So weird thing is that Endeavor

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Speaker 1: is not trading like more than a dollar above the

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Speaker 1: deal price, And if you're buying the stock now hoping

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Speaker 1: to get more money in appraisal, that won't work. You

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Speaker 1: have to have owned the stock.

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Speaker 2: Ago.

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Speaker 1: So I don't really know why the stock is trading

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Speaker 1: like that high. Like I think one answer is there

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Speaker 1: is some expectation that possibly silver Lake will raise the

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Speaker 1: deal price, but they've said they won't. And they've said

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Speaker 1: not only have they said they won't raise the deal price,

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Speaker 1: they've said, if you demand appraisal, and like I read

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Speaker 1: one estimate that like two thirds of shares are going

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Speaker 1: to demand appraisal, they say, if you demand appraisal, we

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Speaker 1: will not pay you anything at closing. We'll wait until

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Speaker 1: years later when the appraisal cases is finished. And that's

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Speaker 1: a little unusual. It used to be that that was

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Speaker 1: the norm. If you demanded appraisal, you didn't get any

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Speaker 1: money when the deal closed, waited until you went through

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Speaker 1: your appraisal case. But one thing that happened is that

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Speaker 1: when you brought an appraisal case years later, the judgment say, okay,

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Speaker 1: the deal price was actually fair. You only get the

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Speaker 1: deal price you get in this case twenty seven fifty,

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Speaker 1: but you also get interest, and the interest is at

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Speaker 1: a very high rate, like it' said five hundred basis

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Speaker 1: points over fed funds. And so people would do appraisal

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Speaker 1: cases thinking well, if I win, I get more money

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Speaker 1: than the deal price, and even if I lose, I

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Speaker 1: get the deal price plus like extremely high interest, so

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Speaker 1: it's great for me. That became annoying enough that it's

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Speaker 1: not become kind of the norm for buyers to just

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Speaker 1: give you the deal price day one and say don't

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Speaker 1: we won't pay you interest on that. If you later

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Speaker 1: win the case, we'll give you the extra money, but

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Speaker 1: like day one, you get the deal price and silver

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Speaker 1: like case said they won't do that in this case,

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Speaker 1: which I think people will perceive as like trying to

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Speaker 1: smoke out week hounds, because if you're like a arbor

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Speaker 1: treasurer and you have to finance the position for years,

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Speaker 1: you might be like, yeah, never mind. Yeah, But here

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Speaker 1: they're kind of insisting they're not going to raise the

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Speaker 1: deal price. They're going to fight the appraisal case. They

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Speaker 1: say that the price of TKO is artificial and like

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Speaker 1: it's you know, has to do with arbitrage activity and

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Speaker 1: it's not like a real price, which is not a

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Speaker 1: lot of evidence for and Endeavor has itself been buying

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Speaker 1: TKO shares, so there's some reason to think it's not

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Speaker 1: a completely artificial price, and it has to do more

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Speaker 1: with like tk's business.

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Speaker 2: Has been doing well fundamentals, perhaps fundamentals. I don't know,

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Speaker 2: I find myself sympathetic to this private equity company.

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Speaker 1: Oh yeah, me too. It's weird that it's weird that

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Speaker 1: you don't get the benefit of that, right and like

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Speaker 1: right and again, like in the context of like if

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Speaker 1: like Endeavor was trying to back out of the deal,

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Speaker 1: you'd be like, no, you like you signed a deal

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Speaker 1: like had like TKO gone down and Silver like couldn't

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Speaker 1: get out of the deal TKO went up. You can't

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Speaker 1: get out of the deal. It's totally like a reasonable

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Speaker 1: thing for cilvill like to be like, look, we won't.

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Speaker 1: We got the benefit of our bargain.

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Speaker 2: But it's not how I feel like we're going to

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Speaker 2: be talking about this again.

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Speaker 1: Yeah, I don't know. I mean, one possibility is they

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Speaker 1: will bump the deal price a little bit, but there's

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Speaker 1: kind of a big gap between what the arbitragures think

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Speaker 1: this company is worth and what so really I quanted

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Speaker 1: to pay, So you know, they may just.

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Speaker 2: Fight it for years years of content. Well, let's return

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Speaker 2: to something that we have already talked about, sure, and

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Speaker 2: that is private credit liquidity, specifically in ETFs.

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Speaker 1: I feel like I spent years writing people are worried

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Speaker 1: about bombacking liquidity and making a big joke of it,

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Speaker 1: and now I feel like I've spent one year of

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Speaker 1: this podcast talking every week about people being worried about

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Speaker 1: credit liquidity, and here we are talking about private credit liquidity.

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Speaker 2: That's true. Well, the b Bank of International Settlements is

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Speaker 2: worried about social warriors. Yeah, they're coming out with a

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Speaker 2: lot of concerns basically about exactly that liquidity. You have

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Speaker 2: this rush for retail hash among just the asset management world,

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Speaker 2: and they're worried that that's going to create vulnerabilities.

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Speaker 1: I feel we've talked about this on the podcast before,

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Speaker 1: but I wanted to ask you. Yeah, okay, retail private

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Speaker 1: credit vehicles have been a thing for years. Uncontroversially. There's

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Speaker 1: a thing that's called a business development company or BDC. Yeah,

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Speaker 1: it is a retail private credit vehicle. There are lots

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Speaker 1: of them. They trade on the Stock Exchange, they have tickers.

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Speaker 1: They're effectively closed down fund for like direct lending off

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Speaker 1: in middle market like direct lending. And so you can

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Speaker 1: buy a retail private credit fund in your brokerage account

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Speaker 1: and that's not a liquidity worry. I mean it is

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Speaker 1: a little bit like the BS A little bit worried

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Speaker 1: about BDCs because they're levered, But fundamentally a BDC is

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Speaker 1: a close doun fund, right Like you can put money in,

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Speaker 1: you can't take money out. You can trade shares on

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Speaker 1: the stock exchange, but you can't go to the BDC

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Speaker 1: and say I want my money back. And so the

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Speaker 1: liquidity where people have is like investors in liquid exchange

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Speaker 1: traded private credit funds will go to the private credit

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Speaker 1: fund and say I want my money back, and the

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Speaker 1: private credit fund will have we have all these liquid loans.

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Speaker 1: We can't give your money back. They're all tied up

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Speaker 1: and loans and then like the world will come crashing down.

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Speaker 1: But BDCs just don't have that problem.

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Speaker 2: Yeah, go on.

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Speaker 1: The BIS is worried because like there's one ets, just

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Speaker 1: one et ETF. If you can go to the issuer

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Speaker 1: and say I want my back, my question is why

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Speaker 1: do we need the ETF. I understand that in your world,

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Speaker 1: the best of all things is the ETF. And I

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Speaker 1: understand obviously a marketing benefit, but like if you're a

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Speaker 1: private credits you're like, you're like, okay, the right funding

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Speaker 1: model is a permanent capital closed then fund funding model.

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Speaker 1: That technology exists. We have billions of dollars in it. Yeah,

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Speaker 1: why do we need to go to the ETF.

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Speaker 2: You also have interval funds. You have had ways for

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Speaker 2: retail to access privately.

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Speaker 1: Like interval funds, like you might be a little worry

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Speaker 1: about liquidity, is like a fully closed un fund. But

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Speaker 1: like you're right, you have a lot of things that

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Speaker 1: are not ETFs.

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Speaker 2: Yeah, you do have ETFs. Does the world need private

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Speaker 2: credit ETFs? I don't know. I'm not qualified to answer

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Speaker 2: that question, but it just speaks to the desire among

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Speaker 2: a lot of these issuers and a lot of these

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Speaker 2: private market folks wanting to tap into this new source

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Speaker 2: of demand. I mean, I know, but like, why.

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Speaker 1: Is that a new source? Like to me, it's weaks

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Speaker 1: to the desire of retail investors to have specifically an

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Speaker 1: ETF and not a right I guess I get the

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Speaker 1: ETF technology is a little nicer, but.

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Speaker 2: It's like I think it's this is just one woman's suspicion.

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Speaker 2: I think that's the driving force, is that the muscle

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Speaker 2: memory is there people know how to get their hands

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Speaker 2: on ETFs, that muscle memory might not exist or be

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Speaker 2: developed when it comes to BDCs. This is the same thing,

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Speaker 2: I know, but it's just it's nice.

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Speaker 1: There's a lot of stuff that's like more like there's

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Speaker 1: like publicly trader well.

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Speaker 2: I talk to a lot of asset managers and a

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Speaker 2: lot of asset C suites at asset management firms, and

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Speaker 2: they always tell me we're rapper agnostic. We will pick

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Speaker 2: the product that fits best with the asset class that

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Speaker 2: we're talking about. And I have the suspicion that for

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Speaker 2: a lot of retail investors or folks who started investing

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Speaker 2: in the last five years or so, basically the post

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Speaker 2: pandemic period, it's single stocks or it's ETFs. Like people

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Speaker 2: know how to do that. They know how to go

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Speaker 2: to Robinhood or Fidelity or whatever platform they use and

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Speaker 2: buy an ETF. It's simple.

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Speaker 1: It's just as simple to buy a BDC.

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Speaker 2: I know, but I feel like the familiarity isn't there

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Speaker 2: if you have an ETF that says I am a

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Speaker 2: private credit ETF. Give me a name of a BDC.

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Speaker 2: It doesn't read as cleanly. There's so many examples.

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Speaker 1: It's true that the words BDC make it sound like

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Speaker 1: something other than a close than private equity fund, private

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Speaker 1: credit fund, so right, you could be confused by that.

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Speaker 2: Yeah, there's so many examples of tickers that tend to outperform,

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Speaker 2: even though there's a fund that offers the same exposure

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Speaker 2: and it's priced lower. But it's just this fund has

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Speaker 2: a nicer name, and it has a more intuitive ticker,

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Speaker 2: and that's why it tends to get If you launch.

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Speaker 1: A private credityf, then like people read articles about like yeah,

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Speaker 1: the first private credity.

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Speaker 2: And the SEC might write a letter basically saying how

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Speaker 2: upset it is that this private credit ETF that they

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Speaker 2: allowed to launch actually launched.

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Speaker 1: Or the BIS might read a report.

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Speaker 2: Something that I thought was interesting in the BIS report

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Speaker 2: is that it's talking about, basically, it's worried that you're

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Speaker 2: going if you introduce retail into this marketplace that you're

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Speaker 2: going to one day see this exodus and then you

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Speaker 2: see the illiquidity doom loop that people like to talk.

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Speaker 1: About hotel redeemable retail, Right, Yeah, you have locked up retail.

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Speaker 2: Yeah, I think that maybe they're worrying about the wrong

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Speaker 2: cohort of investors because I don't know. I think about

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Speaker 2: products that are really popular with retail, and I think

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Speaker 2: about the average vanguard investor, for example, that sort of

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Speaker 2: self directed mom and pop sort of said, or people

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Speaker 2: who are working with financial advisors. There's a lot of

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Speaker 2: sticky retail cash out there. It's more these ETFs that

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Speaker 2: are used as like trading vehicles or liquids sleeves, what

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Speaker 2: have you. That's where you tend to see more panicky

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Speaker 2: outflows than you do with ETFs that are straight up

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Speaker 2: retail products.

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Speaker 1: Yeah. I think, like in general, that people are worried

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Speaker 1: about whatever. Liquidity worries are always like a little bit overblown,

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Speaker 1: particularly it comes to retail. Now, ETFs are not a

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Speaker 1: purely retail product, right, And you can imagine if private

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Speaker 1: credit ETFs became a bigger thing, like some more institutional

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Speaker 1: people allocating money to them for whatever reason is like

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Speaker 1: you know, indexy private credit exposure and taking money out

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Speaker 1: in a downturn. You can also just imagine retail panicking. Like,

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Speaker 1: I agree with you that, like it's often stickier than

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Speaker 1: like the worries that people have, but yeah, it's still

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Speaker 1: a possibility to me. Like the solution to this worry

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Speaker 1: is like, like, the reason I was never that worried

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Speaker 1: about bomb market liquidity is because like, eh, that you

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Speaker 1: can't trade your bonds, like the press will go down.

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Speaker 1: It's not a deal. Yeah, that's not really true. In

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Speaker 1: private credit, it's like not as true, right, because you

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Speaker 1: kind of can't trade your private credit. But like one

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Speaker 1: thing we've talked about a lot on this podcast is

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Speaker 1: like that's gonna change. There's gonna be a private credit market.

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Speaker 1: You'll be able to trade your private credit, and so

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Speaker 1: there'll be some like outlet for it where if everyone

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Speaker 1: does take their money out of the ETF, there's some

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Speaker 1: way to you know, monetize the underlying hole things so

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Speaker 1: that like the system doesn't freeze.

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Speaker 2: Won't it be fun to find out though?

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Speaker 1: Oh yeah, it'll be very fun to watch the development

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Speaker 1: of private credit trading platforms.

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Speaker 2: I was speaking to Mark lib Schultz of Blue al

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Speaker 2: a couple of weeks ago at Bloomberg invest and I

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Speaker 2: kind of like his stance. I mean, you have the

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Speaker 2: Apollos of the world saying that the private markets are

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Speaker 2: going to become the new public markets, and that's the

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Speaker 2: theme you've written about a lot. His stance is more

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Speaker 2: private markets should be private markets. They're not trying to

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Speaker 2: build out a trading desk like Apollo. I believe that

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Speaker 2: they filed for an interval fund for private assets, but

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Speaker 2: they're not on board with this. You know, private should

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Speaker 2: be out in the public.

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Speaker 1: It is true that, like one attraction of private credit

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Speaker 1: to a lot of borrowers is you will have a

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Speaker 1: relationship with a small defined group of lenders rather than

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Speaker 1: like who knows who owns your debt today? Right, Like

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Speaker 1: that's an appeal to borrow Then that's undermined if you

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Speaker 1: sort of a trading desk and want private credit to

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Speaker 1: be super liquid. So it sort of makes sense that

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Speaker 1: a lot of people would not want them. Yeah, but

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Speaker 1: I sort of bet on everything becoming traded over time.

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Speaker 2: Yeah, that does seem to be the future that we

405
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Speaker 2: were marching towards. Just a note on the State Street

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Speaker 2: Apollo ETF. There has been a ton of drama over it. Again.

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Speaker 2: The SEC sent a strongly worded letter which was fun

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Speaker 2: and unusual. It really hasn't attracted too many inflows just yet, which.

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Speaker 1: Waiting to see if it's illegal. Yeah, well not private credit.

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Speaker 2: Well that's true.

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Speaker 1: I think it was.

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Speaker 2: CFR.

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Speaker 1: I did buy a BDC. It's all private.

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Speaker 2: Creditsjeez, Louise, I get it. You you run a BDC market,

415
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Speaker 2: who is paying you? CFRII did an analysis early in

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Speaker 2: so it wasn't quite fair because it hadn't been alive

417
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Speaker 2: for that long, but they found that like five percent

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Speaker 2: of its portfolio was private credit. But it says it

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Speaker 2: can go up to thirty five percent.

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Speaker 4: We'll see.

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Speaker 2: The American Dream is a mall in New Jersey.

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Speaker 1: We barely have anything to talk about, but we both

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Speaker 1: love malls in New Jersey, and so.

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Speaker 2: We simultaneously have not that much to say, but also.

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Speaker 1: A lot to talk about. The American Dream lok.

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Speaker 2: No, which is crazy. So I drive to New Jersey

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Speaker 2: all the time to go horseback riding. So I passed

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Speaker 2: the American Dream mall probably four to six times a week,

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Speaker 2: and I always just look at it and I can't

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Speaker 2: believe it exists. I can't believe it exists, and it

431
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Speaker 2: so many times it almost it doesn't exists.

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Speaker 1: For test purposes to this American Dream is a mall.

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Speaker 1: It's so much more than a mall. We'll get to that,

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Speaker 1: but it's a mall in New Jersey, and it took

435
00:21:11,440 --> 00:21:14,040
Speaker 1: a very long time to develop. And that's development was

436
00:21:14,040 --> 00:21:16,159
Speaker 1: filled with trauma, some of which I was involved in

437
00:21:16,200 --> 00:21:16,800
Speaker 1: as a young lawyer.

438
00:21:16,920 --> 00:21:17,959
Speaker 2: Yeah, I want to get into that.

439
00:21:18,680 --> 00:21:21,440
Speaker 1: But so as part of the development, they like got

440
00:21:21,440 --> 00:21:23,560
Speaker 1: some land from the state and like they agreed to

441
00:21:23,600 --> 00:21:25,880
Speaker 1: make payments and the taxes just kind of like taxes

442
00:21:26,080 --> 00:21:29,800
Speaker 1: to the local government. And basically the way it where

443
00:21:29,880 --> 00:21:31,280
Speaker 1: is like you developed them all and you're not making

444
00:21:31,320 --> 00:21:34,359
Speaker 1: payments because it's like, you know, you're spending all your

445
00:21:34,359 --> 00:21:35,880
Speaker 1: money to developing them all, and then you're like you're

446
00:21:35,920 --> 00:21:38,000
Speaker 1: running the mall, you're making money, and you start making

447
00:21:38,040 --> 00:21:42,080
Speaker 1: the payments and the taxes. And that was the deal.

448
00:21:42,480 --> 00:21:46,119
Speaker 1: And the company has been running the mall for some

449
00:21:46,280 --> 00:21:48,640
Speaker 1: number of years now. It opened in twenty nineteen.

450
00:21:48,359 --> 00:21:51,359
Speaker 2: Which is an amazing time to open a mall, such.

451
00:21:51,240 --> 00:21:54,960
Speaker 1: A good mall, and they have not been making the

452
00:21:54,960 --> 00:21:57,560
Speaker 1: payments of the taxes because they said, no, we're not

453
00:21:57,640 --> 00:22:00,719
Speaker 1: we're not like officially open to the public for business. Sure,

454
00:22:01,119 --> 00:22:04,720
Speaker 1: some stores are open, the ski slope, the water park,

455
00:22:05,800 --> 00:22:06,440
Speaker 1: some other things.

456
00:22:06,760 --> 00:22:07,960
Speaker 2: There's a roller coaster, there's.

457
00:22:07,800 --> 00:22:10,720
Speaker 1: A roller coast ferris wheel, but we're not at one

458
00:22:10,800 --> 00:22:12,879
Speaker 1: hundred percent occupancy, which like no malls e run one

459
00:22:12,920 --> 00:22:15,600
Speaker 1: hundred percent occupancy. We're not one hundred percent occupancy, so

460
00:22:15,640 --> 00:22:18,040
Speaker 1: we're not technically open to the general public, and so

461
00:22:18,040 --> 00:22:20,800
Speaker 1: we don't have to make the payments yet. And the

462
00:22:20,840 --> 00:22:23,680
Speaker 1: Lowy government sued and this past week the mall lost

463
00:22:23,720 --> 00:22:26,080
Speaker 1: and the judge just like, come on, you're open for business,

464
00:22:26,280 --> 00:22:27,560
Speaker 1: and so they have to make all the payments.

465
00:22:27,640 --> 00:22:30,080
Speaker 2: I want to believe that the judge specifically went to

466
00:22:30,119 --> 00:22:31,240
Speaker 2: the mall just to check it out.

467
00:22:31,359 --> 00:22:34,400
Speaker 1: You know, if she went to this mall which you have,

468
00:22:34,920 --> 00:22:37,600
Speaker 1: which I have, you would think it's open for business.

469
00:22:37,640 --> 00:22:38,960
Speaker 1: It's like a little bit of a weird mall because

470
00:22:39,000 --> 00:22:40,800
Speaker 1: it's so big. Yeah, it's like you kind of feel

471
00:22:40,840 --> 00:22:42,840
Speaker 1: like there must be thousands of people elsewhere and not here.

472
00:22:43,280 --> 00:22:44,879
Speaker 1: But no, I've been to this mall a couple of

473
00:22:44,920 --> 00:22:47,919
Speaker 1: times and walked through it on the way to the

474
00:22:47,960 --> 00:22:49,920
Speaker 1: giant indoor water park that is at the mall.

475
00:22:50,080 --> 00:22:52,960
Speaker 2: Amazing, it's so good. You've shown me photos of this

476
00:22:53,040 --> 00:22:55,440
Speaker 2: water park and it looks like you're on a cruise ship,

477
00:22:55,600 --> 00:22:57,080
Speaker 2: like it is soize.

478
00:22:58,160 --> 00:23:01,840
Speaker 1: I've also recently saw an Instagram video from a friend

479
00:23:01,880 --> 00:23:06,760
Speaker 1: of mine who took her kids skiing at the American

480
00:23:06,840 --> 00:23:07,240
Speaker 1: Dream Hall.

481
00:23:07,359 --> 00:23:08,440
Speaker 2: So did Kim Kardashian.

482
00:23:08,720 --> 00:23:13,480
Speaker 1: Yeah, big indoor ski slope being relative, sure, I don't

483
00:23:13,520 --> 00:23:20,200
Speaker 1: have a great sample, right, it's not like Aspen. Bigger

484
00:23:20,200 --> 00:23:21,800
Speaker 1: than slop at my house.

485
00:23:21,720 --> 00:23:26,200
Speaker 2: Yes, probably bigger than the ski slope at most indoor malls.

486
00:23:26,760 --> 00:23:29,400
Speaker 1: Yes, yeah, I don't know the world record for.

487
00:23:29,920 --> 00:23:31,560
Speaker 2: I feel like it's in Dubai or something.

488
00:23:31,920 --> 00:23:33,600
Speaker 1: Oh yeah, I think I think there is a big

489
00:23:33,600 --> 00:23:35,760
Speaker 1: indoor ski slop in Dubai. Anyway, it's a big one

490
00:23:35,760 --> 00:23:38,560
Speaker 1: for a mall. It's a big mall, and it's very

491
00:23:38,680 --> 00:23:43,280
Speaker 1: much in operation. You know, it's so in operation that

492
00:23:44,560 --> 00:23:47,680
Speaker 1: it's open on Sundays, which violates like the local blue laws,

493
00:23:47,720 --> 00:23:50,359
Speaker 1: and like there's a reporting that like the city of

494
00:23:50,359 --> 00:23:53,280
Speaker 1: paramis or somebody's going to sue to bake them clothes

495
00:23:53,280 --> 00:23:53,880
Speaker 1: on Sundays.

496
00:23:53,960 --> 00:23:57,400
Speaker 2: I love that the American Dream is not paying taxes,

497
00:23:57,440 --> 00:23:59,679
Speaker 2: and also it's open on Sundays. It just and it's

498
00:23:59,720 --> 00:24:03,040
Speaker 2: a new It just feels all of it it is

499
00:24:03,280 --> 00:24:09,040
Speaker 2: together so deliciously, and I'm I'm just so grateful that

500
00:24:09,119 --> 00:24:11,639
Speaker 2: it exists. I haven't been, so I drive past it

501
00:24:11,680 --> 00:24:15,399
Speaker 2: all the time, and usually I'm alone. I'm not going

502
00:24:15,480 --> 00:24:17,920
Speaker 2: to go by myself. I don't have my horse, I

503
00:24:17,920 --> 00:24:20,959
Speaker 2: don't have my husband. The mall probably, I mean it's

504
00:24:21,000 --> 00:24:25,920
Speaker 2: he probably has like a I mean hopefully someone that's

505
00:24:26,000 --> 00:24:28,399
Speaker 2: listening and getting ideas of how to build out them

506
00:24:28,400 --> 00:24:33,160
Speaker 2: all further. I can't believe it exists. I'm worried though

507
00:24:33,160 --> 00:24:35,240
Speaker 2: it'll be too crowded. Every time I drive past and

508
00:24:35,280 --> 00:24:37,480
Speaker 2: think about going in, I'm worried that, you know, it

509
00:24:37,560 --> 00:24:39,199
Speaker 2: just wouldn't even be fun because there's going to be

510
00:24:39,240 --> 00:24:41,000
Speaker 2: lines for the indoor ski slope.

511
00:24:41,119 --> 00:24:44,119
Speaker 1: I don't know. I've only been on weekdays during school breaks,

512
00:24:44,119 --> 00:24:47,040
Speaker 1: and it's not that crowd. The water break gets busy.

513
00:24:47,240 --> 00:24:49,160
Speaker 2: Yeah, I'm sure it's poppin'.

514
00:24:48,760 --> 00:24:50,600
Speaker 1: Yeah, but like the mall feels like, you know, it's

515
00:24:50,640 --> 00:24:51,040
Speaker 1: like a mall.

516
00:24:51,280 --> 00:24:53,480
Speaker 2: Why did they change the name from Xanda Do, though

517
00:24:53,680 --> 00:24:55,440
Speaker 2: Xana Do is such a cool name.

518
00:24:55,640 --> 00:24:57,280
Speaker 1: I don't know, actually, But like when I was a

519
00:24:57,280 --> 00:24:59,400
Speaker 1: young lawyer, I worked in the cell of the troubled

520
00:24:59,440 --> 00:25:02,280
Speaker 1: company that, among other things, owned meadowlands at Zanta dou

521
00:25:02,320 --> 00:25:05,000
Speaker 1: as it was then called This was like fifteen years

522
00:25:05,040 --> 00:25:07,119
Speaker 1: before them all actually opened. Them all opened in twenty nineteen.

523
00:25:07,160 --> 00:25:09,040
Speaker 1: This is like I was like doing like twenty two

524
00:25:09,080 --> 00:25:14,199
Speaker 1: thousand five or something, and it became if hecame so

525
00:25:14,320 --> 00:25:16,879
Speaker 1: famously troubled that it's like there's a picture of it

526
00:25:17,200 --> 00:25:21,240
Speaker 1: on the Wikipedia page for the word booondoggles incredible. So

527
00:25:21,960 --> 00:25:25,200
Speaker 1: I think maybe they were like, this is cursed. We

528
00:25:25,320 --> 00:25:26,280
Speaker 1: need to change the name.

529
00:25:26,600 --> 00:25:28,920
Speaker 2: So like people will we need to make people for cat.

530
00:25:29,080 --> 00:25:31,560
Speaker 1: Yeah. Yeah. If you like went to like a retailer

531
00:25:31,640 --> 00:25:33,359
Speaker 1: and we're like, hey, would you like to open our

532
00:25:33,359 --> 00:25:35,240
Speaker 1: store in our mall, They're like, what mall? And you're

533
00:25:35,240 --> 00:25:37,439
Speaker 1: like metalands Xanati the God No, right, So you have

534
00:25:37,440 --> 00:25:39,240
Speaker 1: to change the name. I think that might be it

535
00:25:39,560 --> 00:25:41,520
Speaker 1: also just like you know, it's like different companies took

536
00:25:41,520 --> 00:25:42,720
Speaker 1: it over and like you want to put your own

537
00:25:42,720 --> 00:25:43,320
Speaker 1: branding on it.

538
00:25:43,600 --> 00:25:44,800
Speaker 2: Yeah, yeah, fair enough.

539
00:25:45,320 --> 00:25:46,439
Speaker 1: Dad is a pretty good name for them all?

540
00:25:46,520 --> 00:25:48,240
Speaker 2: Yeah, pretty good. I don't know. Maybe you'll name a

541
00:25:48,320 --> 00:25:50,760
Speaker 2: child Sandado. But also part of the reason I can't

542
00:25:50,760 --> 00:25:55,040
Speaker 2: believe it exists is because I've been traveling the well

543
00:25:55,080 --> 00:25:58,480
Speaker 2: worn path between Manhattan and New Jersey for my entire

544
00:25:58,600 --> 00:26:02,000
Speaker 2: life and for a lot of my life. This thing

545
00:26:02,240 --> 00:26:04,359
Speaker 2: was just on the side of the highway, not open.

546
00:26:04,520 --> 00:26:06,800
Speaker 1: Famous dog under construction. Amazing.

547
00:26:07,160 --> 00:26:10,800
Speaker 2: Yeah, so I feel like in a way, like I'm

548
00:26:10,840 --> 00:26:12,800
Speaker 2: not sure it exists right.

549
00:26:12,720 --> 00:26:15,800
Speaker 1: Right, You short of get the benefit of that being

550
00:26:15,880 --> 00:26:17,800
Speaker 1: like our mall isn't open because it's like it wasn't

551
00:26:17,840 --> 00:26:20,000
Speaker 1: open for twenty years, Like, who would believe it open?

552
00:26:20,160 --> 00:26:24,240
Speaker 2: It's only been open for five to six years. Twenty

553
00:26:24,320 --> 00:26:26,800
Speaker 2: five year history exactly. So I don't know. Maybe in

554
00:26:26,840 --> 00:26:30,000
Speaker 2: another couple of decades I'll believe it truly that it's open.

555
00:26:31,680 --> 00:26:35,200
Speaker 1: Just Endo Skiing Resort is in Shanghaier.

556
00:26:34,080 --> 00:26:39,119
Speaker 2: Tells us, Wow, I knew it wasn't here in New Jersey. Also,

557
00:26:39,200 --> 00:26:42,280
Speaker 2: thank you to everyone who's been emailing into the Money

558
00:26:42,280 --> 00:26:44,720
Speaker 2: Stuff mail bag. Next week we're going to be doing

559
00:26:44,720 --> 00:26:51,680
Speaker 2: a mail bag episode. So Katy off, yes skiing, Yeah

560
00:26:51,760 --> 00:26:55,840
Speaker 2: at an undisclosed location outdoors, Yeah, an indoor outdoor ski slope.

561
00:26:57,720 --> 00:26:59,200
Speaker 1: And that was the Money Stuff Podcast.

562
00:26:59,320 --> 00:27:01,359
Speaker 2: I'm Matt Levi and I'm Katie Greifeld.

563
00:27:01,720 --> 00:27:04,520
Speaker 1: You can find my work by subscribing to The moneystuffnewsletter

564
00:27:04,560 --> 00:27:06,280
Speaker 1: on Bloomberg dot com.

565
00:27:05,960 --> 00:27:08,480
Speaker 2: And you can find me on Bloomberg TV. Every day

566
00:27:08,520 --> 00:27:11,600
Speaker 2: on Open Interest between nine to eleven am Eastern.

567
00:27:12,080 --> 00:27:13,840
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568
00:27:13,840 --> 00:27:17,040
Speaker 1: email to Moneypod at Bloomberg dot net, ask us a

569
00:27:17,119 --> 00:27:18,520
Speaker 1: question and we might answer it on air.

570
00:27:18,680 --> 00:27:20,879
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571
00:27:20,920 --> 00:27:22,919
Speaker 2: right now and leave us a review. It helps more

572
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Speaker 2: people find the show.

573
00:27:24,560 --> 00:27:27,359
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574
00:27:27,440 --> 00:27:28,640
Speaker 1: Moses onam Our.

575
00:27:28,560 --> 00:27:30,600
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576
00:27:30,800 --> 00:27:32,359
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577
00:27:32,200 --> 00:27:35,399
Speaker 2: Executive producer, and Stage Bauman is Bloomberg's head of Podcasts.

578
00:27:35,720 --> 00:27:38,040
Speaker 1: Thanks for listening to The Money Stuff Podcasts. We'll be

579
00:27:38,119 --> 00:27:39,640
Speaker 1: back next week with more stuff