1 00:00:00,840 --> 00:00:04,000 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:05,280 Speaker 1: my co host Matt Miller. 3 00:00:05,640 --> 00:00:09,600 Speaker 2: Every business day, we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:13,640 Speaker 2: and Bloomberg experts, along with essential market moving news. 5 00:00:14,160 --> 00:00:17,279 Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 6 00:00:17,400 --> 00:00:20,520 Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast. 7 00:00:21,239 --> 00:00:23,400 Speaker 1: One of the stories markets are dealing with today is 8 00:00:23,440 --> 00:00:25,720 Speaker 1: some economic data coming out of China a little bit disappointing. 9 00:00:26,000 --> 00:00:30,400 Speaker 1: Consumer and producer prices fell together for the first time 10 00:00:30,440 --> 00:00:33,839 Speaker 1: in twenty twenty eight deflation deflation cycle. You could call 11 00:00:33,880 --> 00:00:35,959 Speaker 1: it Tom Orlick. He knows a thing or two about China. 12 00:00:36,040 --> 00:00:38,239 Speaker 1: He lived and worked in Beijing for many years. He 13 00:00:38,320 --> 00:00:41,280 Speaker 1: is the chief economist for Bloomberg Economics. He joins us 14 00:00:41,360 --> 00:00:44,159 Speaker 1: via zoom. Hey, Tom, you know, when we all came 15 00:00:44,159 --> 00:00:48,559 Speaker 1: into twenty twenty three, I think most companies, most countries 16 00:00:48,600 --> 00:00:50,440 Speaker 1: around the world said, hey, one of the stories of 17 00:00:50,440 --> 00:00:52,880 Speaker 1: twenty twenty three is it going to be China reopening 18 00:00:52,880 --> 00:00:54,680 Speaker 1: and that's going to be good for the global economy. 19 00:00:55,000 --> 00:00:57,440 Speaker 1: That's not really playing out? Is it tell us what's 20 00:00:57,440 --> 00:00:59,240 Speaker 1: going on with China and its economy. 21 00:01:00,680 --> 00:01:03,000 Speaker 3: So I think that's right, Paul. If we go back 22 00:01:03,040 --> 00:01:04,920 Speaker 3: to the end of twenty twenty two start of twenty 23 00:01:04,959 --> 00:01:08,880 Speaker 3: twenty three, there was a lot of optimism. China exited 24 00:01:08,920 --> 00:01:12,319 Speaker 3: its COVID lockdowns quicker than most people expected, and the 25 00:01:12,400 --> 00:01:15,880 Speaker 3: rebound in the first quarter was stronger than most people expected. 26 00:01:16,600 --> 00:01:18,720 Speaker 3: What we're seeing though, as we pushed into the second 27 00:01:18,760 --> 00:01:22,319 Speaker 3: half of the year is that rebound really didn't have legs, 28 00:01:22,480 --> 00:01:25,400 Speaker 3: and very quickly the story on China blung back to 29 00:01:25,440 --> 00:01:30,320 Speaker 3: all of those significant structural problems. High debt, massive overcapacity 30 00:01:30,319 --> 00:01:33,319 Speaker 3: in the real estate sector, growing tensions in relations with 31 00:01:33,319 --> 00:01:37,840 Speaker 3: the United States, demographic drag, and these factors are dragging 32 00:01:37,840 --> 00:01:41,759 Speaker 3: on growth, and they're also, as you know, dragging on prices. 33 00:01:42,000 --> 00:01:44,640 Speaker 3: So in addition to all of those structural problems, China 34 00:01:44,720 --> 00:01:47,120 Speaker 3: now battling with deflation as well. 35 00:01:47,280 --> 00:01:50,440 Speaker 4: Also consumer spending not being quite as strong as economists 36 00:01:50,480 --> 00:01:52,160 Speaker 4: were anticipating. Why is that. 37 00:01:53,920 --> 00:01:54,000 Speaker 5: So? 38 00:01:54,400 --> 00:01:57,720 Speaker 3: I think when you think about the household consumption story, 39 00:01:58,240 --> 00:02:02,800 Speaker 3: there's a couple of significant challenges. So the first challenge is, well, 40 00:02:02,920 --> 00:02:05,960 Speaker 3: when the economy is not doing very well, then households 41 00:02:06,000 --> 00:02:08,880 Speaker 3: don't have big earnings growth, they don't have confidence in 42 00:02:08,919 --> 00:02:12,440 Speaker 3: their future earnings, and that weighs on their consumption. You've 43 00:02:12,440 --> 00:02:16,480 Speaker 3: probably seen the twenty percent use unemployment in China right now. 44 00:02:16,600 --> 00:02:19,120 Speaker 3: If young people are worried about being unemployed, they're not 45 00:02:19,160 --> 00:02:20,680 Speaker 3: going to be hitting the shops. They're not going to 46 00:02:20,680 --> 00:02:24,480 Speaker 3: be spending on tauboo. The second big problem is that 47 00:02:24,560 --> 00:02:26,880 Speaker 3: China's households have a lot of their wealth tied up 48 00:02:26,880 --> 00:02:30,320 Speaker 3: in real estate, and when real estate prices were rising 49 00:02:30,520 --> 00:02:32,720 Speaker 3: as they did for much of the last twenty years, 50 00:02:32,800 --> 00:02:35,640 Speaker 3: well households felt richer. They wanted to go and spend 51 00:02:35,639 --> 00:02:39,320 Speaker 3: some of that wealth. Now huge uncertainty about the real 52 00:02:39,400 --> 00:02:43,480 Speaker 3: estate sector and prices in some secondier cities already heading down. 53 00:02:43,760 --> 00:02:46,440 Speaker 3: That's a blow to household wealth. Means they're less likely 54 00:02:46,480 --> 00:02:46,880 Speaker 3: to spend. 55 00:02:47,560 --> 00:02:50,880 Speaker 1: Hey, Tom, some of these headwinds you're highlighting here, they 56 00:02:50,919 --> 00:02:55,120 Speaker 1: seem pretty in long term in trench, not something easily fixed. 57 00:02:55,400 --> 00:02:59,320 Speaker 1: What in fact can the government do and will the 58 00:02:59,360 --> 00:03:01,160 Speaker 1: government do so? 59 00:03:01,480 --> 00:03:05,760 Speaker 3: We've already seen the government starting to shift policy. We've 60 00:03:05,800 --> 00:03:09,440 Speaker 3: seen mini rate cut by the PBOC. We've seen the 61 00:03:09,480 --> 00:03:13,600 Speaker 3: PBOC China Central Bank also encouraging the commercial banks to 62 00:03:13,680 --> 00:03:16,480 Speaker 3: guide mortgage rates lower. That's meant to give a bit 63 00:03:16,520 --> 00:03:19,679 Speaker 3: more deuce to the real estate sector. We've heard the 64 00:03:19,720 --> 00:03:24,400 Speaker 3: government talk about the importance of boosting consumption so far, 65 00:03:24,560 --> 00:03:28,240 Speaker 3: though whilst there's been a sort of a steady drumbeat 66 00:03:28,400 --> 00:03:33,280 Speaker 3: of pro growth policy announcements, it's really not adding up 67 00:03:33,320 --> 00:03:35,800 Speaker 3: to the size of stimulus which I think markets are 68 00:03:35,800 --> 00:03:39,440 Speaker 3: looking for to turn the short term narrative on China around. 69 00:03:39,920 --> 00:03:43,320 Speaker 4: China is the world's, as you know, second largest economy 70 00:03:43,320 --> 00:03:45,920 Speaker 4: behind the United States. How much of an issue with 71 00:03:46,040 --> 00:03:48,640 Speaker 4: this slowing growth could it have more globally when you 72 00:03:48,720 --> 00:03:50,680 Speaker 4: have the US seeing obviously when you think about these 73 00:03:50,680 --> 00:03:54,400 Speaker 4: inflation numbers, we're getting another reading tomorrow with CPI but improving. 74 00:03:56,360 --> 00:03:59,640 Speaker 3: Yes. So if we come back to the beginning of 75 00:03:59,680 --> 00:04:04,680 Speaker 3: the year, there was a fear that a surging Chinese 76 00:04:04,720 --> 00:04:08,840 Speaker 3: recovery would be great news for China, but by reducing 77 00:04:08,920 --> 00:04:13,240 Speaker 3: commodity prices, by pushing up prices for oil and soft 78 00:04:13,240 --> 00:04:17,560 Speaker 3: commodities like soybeans, it could give extra legs to the 79 00:04:17,560 --> 00:04:21,839 Speaker 3: global inflation story, and that potentially could keep the FED 80 00:04:21,920 --> 00:04:24,839 Speaker 3: and the ECB and the Bank of England hiking for 81 00:04:24,920 --> 00:04:27,760 Speaker 3: longer than they would otherwise have had to do. Well 82 00:04:28,000 --> 00:04:29,960 Speaker 3: here we are at the start of August, and the 83 00:04:30,080 --> 00:04:33,840 Speaker 3: Chinese economy is pretty clearly run out of steam, and 84 00:04:33,880 --> 00:04:38,120 Speaker 3: the stimulus so far has been not entirely missing in action, 85 00:04:38,560 --> 00:04:42,080 Speaker 3: but still not adequate to the task. What that means 86 00:04:42,320 --> 00:04:45,400 Speaker 3: is that impulse to global commodity prices, if anything, is 87 00:04:45,440 --> 00:04:48,760 Speaker 3: in the other direction. So China isn't making the FEDS 88 00:04:48,880 --> 00:04:52,560 Speaker 3: job harder by adding to global inflation, if anything, is 89 00:04:52,600 --> 00:04:55,919 Speaker 3: making it a little bit easier by subtracting from global inflation. 90 00:04:56,320 --> 00:04:58,280 Speaker 4: Do you think that investors in the US are too 91 00:04:58,320 --> 00:05:01,200 Speaker 4: optimistic about a soft landed and maybe not thinking about 92 00:05:01,240 --> 00:05:03,640 Speaker 4: some of the issues that are potentially going on in 93 00:05:03,720 --> 00:05:05,480 Speaker 4: China and how that could obviously affect, like you were 94 00:05:05,480 --> 00:05:07,080 Speaker 4: talking about the Fed's interest rate path. 95 00:05:09,080 --> 00:05:11,000 Speaker 3: That's a really good question. I mean, I think there's 96 00:05:11,080 --> 00:05:15,520 Speaker 3: just a lot of optimism about about the US right now, 97 00:05:16,600 --> 00:05:20,719 Speaker 3: and clearly a bunch of the recent data sort of 98 00:05:20,720 --> 00:05:24,400 Speaker 3: supports that soft landing narrative. Inflation has been coming down, 99 00:05:25,000 --> 00:05:30,200 Speaker 3: labor markets have remained remarkably robust. At the same time, 100 00:05:30,560 --> 00:05:32,839 Speaker 3: if we think about some of the dynamics in the 101 00:05:32,960 --> 00:05:36,120 Speaker 3: United States, if we think about what's happening with credit 102 00:05:36,160 --> 00:05:38,960 Speaker 3: growth and bank's willingness to make loans. If we think 103 00:05:39,000 --> 00:05:43,680 Speaker 3: about about the amount of distress amongst household borrowers, there 104 00:05:43,720 --> 00:05:48,640 Speaker 3: are some early indicators supporting continuing to support a hard 105 00:05:48,720 --> 00:05:52,040 Speaker 3: landing narrative here, and then if we think more broadly, 106 00:05:52,360 --> 00:05:56,000 Speaker 3: if we think around the world, well, China's growth slowing 107 00:05:56,320 --> 00:05:57,960 Speaker 3: is giving the Fed a bit of an assist on 108 00:05:58,000 --> 00:06:02,880 Speaker 3: controlling inflation, but a slumping Chinese economy is clearly not 109 00:06:03,040 --> 00:06:04,760 Speaker 3: good news for global growth. 110 00:06:05,400 --> 00:06:08,239 Speaker 1: Hey, Tom. Over the last several years, the Chinese government 111 00:06:08,320 --> 00:06:12,400 Speaker 1: really cracked down on some of the tech companies, the 112 00:06:12,520 --> 00:06:16,200 Speaker 1: leading technology companies in China that had listed their shares 113 00:06:16,240 --> 00:06:19,279 Speaker 1: in the West, costing a lot of investors, including Western investors, 114 00:06:19,320 --> 00:06:23,119 Speaker 1: a lot of money in losses. Is there any sense 115 00:06:23,160 --> 00:06:26,240 Speaker 1: that that crackdown upon some of the big tech companies 116 00:06:26,240 --> 00:06:29,240 Speaker 1: in China is contributing to maybe a softer than expected 117 00:06:29,320 --> 00:06:30,080 Speaker 1: kind of reopening. 118 00:06:31,279 --> 00:06:34,560 Speaker 3: Yeah. So, I think that the investors in the West 119 00:06:34,600 --> 00:06:38,839 Speaker 3: didn't get the story on China's tech crackdown quite right. 120 00:06:39,480 --> 00:06:42,560 Speaker 3: I think the view on Wall Street was this is 121 00:06:42,600 --> 00:06:46,160 Speaker 3: hijin Ping against the entrepreneurs, this is the communist party 122 00:06:46,160 --> 00:06:49,760 Speaker 3: against the markets. I think, in fact, what China was 123 00:06:49,800 --> 00:06:52,040 Speaker 3: trying to do was wrestle with some of the big 124 00:06:52,080 --> 00:06:55,080 Speaker 3: problems which governments in the US and Europe wrestled with 125 00:06:55,160 --> 00:06:58,840 Speaker 3: as well. They were wrestling with the problem of excess 126 00:06:58,880 --> 00:07:03,320 Speaker 3: power tech monopolies, wrestling with the problem of what's doing 127 00:07:03,360 --> 00:07:06,720 Speaker 3: in information economy where big tech companies have so much 128 00:07:06,920 --> 00:07:10,440 Speaker 3: access to data on everyone's lives. They did that in 129 00:07:10,480 --> 00:07:13,640 Speaker 3: a way which am with the share price for these companies, 130 00:07:14,040 --> 00:07:16,200 Speaker 3: but that wasn't the objective, right, they were trying to 131 00:07:16,200 --> 00:07:20,400 Speaker 3: deal with these deeper social problems. Still, that added to 132 00:07:20,480 --> 00:07:23,640 Speaker 3: the sense of malaise in China's economy, and it's also 133 00:07:23,680 --> 00:07:26,520 Speaker 3: an area where Chinese policy makers have now pivoted right. 134 00:07:26,840 --> 00:07:30,480 Speaker 3: So we've seen Lee Chang, Chine's premier, and other senior 135 00:07:30,600 --> 00:07:33,800 Speaker 3: leaders out over the last few weeks saying, you know what, 136 00:07:34,160 --> 00:07:37,560 Speaker 3: we get it. We understand that these big tech companies 137 00:07:37,720 --> 00:07:40,760 Speaker 3: are drivers of growth, drivers of productivity, drivers of jobs, 138 00:07:41,160 --> 00:07:42,920 Speaker 3: and whilst we don't want to let them run rier, 139 00:07:42,960 --> 00:07:44,640 Speaker 3: we're not going to let them gauge the rest of 140 00:07:44,680 --> 00:07:47,520 Speaker 3: the economy with their monopoly power. We do want them 141 00:07:47,520 --> 00:07:50,880 Speaker 3: to succeed. So that's part of the policy pivot. Let's 142 00:07:50,880 --> 00:07:53,239 Speaker 3: see in the next few weeks, if that starts to gain. 143 00:07:53,080 --> 00:07:56,640 Speaker 4: Traction, what are your forecast for China's GDP growth for 144 00:07:56,800 --> 00:07:57,280 Speaker 4: this year? 145 00:07:58,720 --> 00:08:01,880 Speaker 3: So it's funny you look at the forecast for growth 146 00:08:01,920 --> 00:08:06,640 Speaker 3: this year. It's really remarkably the headline numbers remarkably robust. Right. 147 00:08:06,960 --> 00:08:09,200 Speaker 3: We still think that China is going to grow above 148 00:08:09,280 --> 00:08:14,880 Speaker 3: five percent this year, and that's pretty much the consensus. Unfortunately, 149 00:08:15,240 --> 00:08:17,920 Speaker 3: the reason for that five percent growth is not because 150 00:08:18,080 --> 00:08:21,560 Speaker 3: China's got robust momentum. It's just because twenty twenty two 151 00:08:21,720 --> 00:08:25,320 Speaker 3: was so disastrous. Right in twenty twenty two, we had 152 00:08:25,360 --> 00:08:28,000 Speaker 3: Shanghai being locked down, we had other big parts of 153 00:08:28,040 --> 00:08:31,000 Speaker 3: the country being lockdown. COVID was still a really big 154 00:08:31,120 --> 00:08:35,120 Speaker 3: drag on activity. When those controls were removed at the 155 00:08:35,200 --> 00:08:38,520 Speaker 3: end of twenty twenty two, we had activity surging back. 156 00:08:38,760 --> 00:08:38,880 Speaker 5: Ye. 157 00:08:39,360 --> 00:08:41,760 Speaker 3: What that means is we have the sort of artificial 158 00:08:41,840 --> 00:08:44,960 Speaker 3: impression of very strong growth this year. In fact, it's 159 00:08:45,000 --> 00:08:47,800 Speaker 3: just the base effect from those COVID lockdowns last year. 160 00:08:48,040 --> 00:08:49,719 Speaker 3: The reality is much more sluggish. 161 00:08:50,480 --> 00:08:52,520 Speaker 1: Tom, Thanks so much for giving us some of your time. 162 00:08:52,520 --> 00:08:54,800 Speaker 1: We really appreciate getting your perspective. We know you lived 163 00:08:54,800 --> 00:08:57,040 Speaker 1: and worked in Beijing for many years, so you have 164 00:08:57,080 --> 00:09:00,280 Speaker 1: a unique person on the ground type of perspective, or 165 00:09:00,640 --> 00:09:04,480 Speaker 1: he's a chief economist for Bloomberg Economics, joining us via 166 00:09:04,520 --> 00:09:08,240 Speaker 1: zoom from Washington, DC. Again, the weaker economy in China 167 00:09:08,240 --> 00:09:11,160 Speaker 1: probably not what the markets were anticipating coming into. 168 00:09:11,000 --> 00:09:13,200 Speaker 4: The year and what that means potentially for the Fed. 169 00:09:13,240 --> 00:09:15,080 Speaker 4: And we do think they are close to being done 170 00:09:15,080 --> 00:09:16,120 Speaker 4: with their tightenings campaign. 171 00:09:16,160 --> 00:09:20,360 Speaker 6: Yep, you're listening to the team. Ken's a our live program, 172 00:09:20,480 --> 00:09:24,480 Speaker 6: Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot Com, 173 00:09:24,520 --> 00:09:27,679 Speaker 6: the iHeartRadio app and the Bloomberg Business App, or listen 174 00:09:27,720 --> 00:09:30,000 Speaker 6: on demand wherever you get your podcasts. 175 00:09:31,920 --> 00:09:33,800 Speaker 1: All right, one of the big news items over the 176 00:09:33,880 --> 00:09:36,080 Speaker 1: last twenty four hours was in the gaming space and 177 00:09:36,080 --> 00:09:39,400 Speaker 1: evolving one of our favorite companies with Walt Disney Company 178 00:09:39,760 --> 00:09:45,880 Speaker 1: doing a deal with Penn Entertainment and kind of getting 179 00:09:45,920 --> 00:09:48,920 Speaker 1: into the sports betting business all in. It's amazing how 180 00:09:48,920 --> 00:09:51,199 Speaker 1: that business has changed over the last three or four years. 181 00:09:51,280 --> 00:09:53,480 Speaker 1: Let's round table with a couple of smart people that 182 00:09:53,600 --> 00:09:55,800 Speaker 1: we happen to know. Githa Rang Andathan. She covers the 183 00:09:55,840 --> 00:09:59,559 Speaker 1: media industry, including the Walt Disney Company for Bloomberg Intelligence, 184 00:10:00,280 --> 00:10:02,800 Speaker 1: just to via Zoom and Brian Egger. He covers all 185 00:10:02,840 --> 00:10:05,200 Speaker 1: the gaming stocks. He's been covering the gaming stocks for 186 00:10:05,440 --> 00:10:09,360 Speaker 1: decades on Wall Street, starting back in DLJ, maybe even 187 00:10:09,360 --> 00:10:11,880 Speaker 1: somewhere before, back in the day. We'll get a sense 188 00:10:11,880 --> 00:10:13,480 Speaker 1: of what it means for the gaming space, he joins 189 00:10:13,559 --> 00:10:16,200 Speaker 1: us here in a Bloomberg Interactive Broker studio. Githa, let's 190 00:10:16,200 --> 00:10:19,960 Speaker 1: start with you here. Is it surprising to you that Disney, 191 00:10:20,480 --> 00:10:25,040 Speaker 1: Mickey Mouse, Wholesome Walt Disney Company is getting into the 192 00:10:25,160 --> 00:10:26,160 Speaker 1: sports betting business. 193 00:10:27,600 --> 00:10:30,920 Speaker 7: Yeah, I mean this has kind of been this question always, Paul. 194 00:10:31,320 --> 00:10:34,720 Speaker 7: You know, obviously Bob Iger and the Disney management team 195 00:10:34,800 --> 00:10:38,160 Speaker 7: have always kind of wanted to keep that squeaky clean, 196 00:10:38,320 --> 00:10:40,760 Speaker 7: you know, family friendly image and didn't really want to 197 00:10:40,800 --> 00:10:44,880 Speaker 7: get into sports betting directly. And you know, Brian Eggers 198 00:10:45,000 --> 00:10:47,320 Speaker 7: has told me so many times it's it's very difficult. 199 00:10:47,440 --> 00:10:50,120 Speaker 7: You know that the sports betting business. Owning a sportsbook 200 00:10:50,160 --> 00:10:52,840 Speaker 7: directly is very difficult. It's fraught with a lot of 201 00:10:53,240 --> 00:10:56,839 Speaker 7: operational a lot of regulatory challenges, and so this kind 202 00:10:56,880 --> 00:10:59,880 Speaker 7: of gives them nice exposures. So it kind of you know, 203 00:11:00,520 --> 00:11:02,400 Speaker 7: they're getting that one and a half billion dollars in 204 00:11:02,440 --> 00:11:05,880 Speaker 7: cash the five hundred million in stock options. So it 205 00:11:05,920 --> 00:11:10,080 Speaker 7: gives them a good exposure without getting directly involved, and 206 00:11:10,160 --> 00:11:12,760 Speaker 7: it kind of tells us that ESPN the brand definitely 207 00:11:12,800 --> 00:11:15,240 Speaker 7: does have value. That is a question that some of 208 00:11:15,240 --> 00:11:17,280 Speaker 7: the investors did have, and this kind of puts to 209 00:11:17,360 --> 00:11:19,040 Speaker 7: rest any of those fears. 210 00:11:19,240 --> 00:11:21,559 Speaker 4: Brian, I want to bring you into this conversation when 211 00:11:21,559 --> 00:11:24,839 Speaker 4: you're looking at this deal here, how does this translate 212 00:11:24,960 --> 00:11:28,080 Speaker 4: into what you think shareholders will want to see from 213 00:11:28,120 --> 00:11:29,080 Speaker 4: this moving forward? 214 00:11:29,679 --> 00:11:33,280 Speaker 8: So the pre existing bars sportsbook deal never really garner 215 00:11:33,400 --> 00:11:36,559 Speaker 8: more than a mid single digit share in the sixteen 216 00:11:36,640 --> 00:11:41,320 Speaker 8: states where Barstool Sportsbook have been active. This has the 217 00:11:41,360 --> 00:11:45,280 Speaker 8: potential to be a much larger generating deal. Now, of course, 218 00:11:45,520 --> 00:11:49,240 Speaker 8: it will involve Pen putting up a billion, basically a 219 00:11:49,240 --> 00:11:52,600 Speaker 8: billion five to two billion dollars in commitments for marketing 220 00:11:52,600 --> 00:11:55,960 Speaker 8: and other things. Basically to get that and rebrand all 221 00:11:56,000 --> 00:11:59,800 Speaker 8: those Barstool sports books as ESPN much much more promising, 222 00:11:59,880 --> 00:12:02,920 Speaker 8: and they are thinking about long term EBIT top potential 223 00:12:02,960 --> 00:12:06,319 Speaker 8: annually of five hundred million dollars to billion dollars. We're 224 00:12:06,360 --> 00:12:08,840 Speaker 8: going to still take some time to work the numbers 225 00:12:08,880 --> 00:12:11,760 Speaker 8: on that, but that's really where the opportunity is because 226 00:12:11,960 --> 00:12:15,000 Speaker 8: ESPN is such a coveted brand. Well, I should mention 227 00:12:15,160 --> 00:12:17,880 Speaker 8: other media companies that have endeavored to team up with 228 00:12:17,880 --> 00:12:21,959 Speaker 8: sportsbooks have had a tough time breaking through and taking 229 00:12:22,000 --> 00:12:23,680 Speaker 8: on the likes of Draftkingks and FanDuel. 230 00:12:23,800 --> 00:12:25,840 Speaker 4: Why has that been such a challenge. 231 00:12:26,240 --> 00:12:28,520 Speaker 8: I think it's just a fairly competitive business with a 232 00:12:28,559 --> 00:12:33,760 Speaker 8: lot of upfront customer acquisitions costs, and the more native operators. 233 00:12:34,040 --> 00:12:35,960 Speaker 8: You know, you have draftkingks and fando which have been 234 00:12:36,040 --> 00:12:38,839 Speaker 8: daily fantasy sports operators. You have the likes of bet 235 00:12:38,920 --> 00:12:41,760 Speaker 8: MGM and Caesars, which were closely affiliated with big name 236 00:12:41,800 --> 00:12:44,840 Speaker 8: brand casino companies. So for that reason, it's a pretty 237 00:12:44,880 --> 00:12:47,920 Speaker 8: crowded landscape and it has not been as easy as 238 00:12:47,960 --> 00:12:51,240 Speaker 8: one might think for even a well regarded media outfit 239 00:12:51,520 --> 00:12:53,160 Speaker 8: to break into this space. 240 00:12:53,559 --> 00:12:55,679 Speaker 1: So Githy, you highlight an inching point here that it 241 00:12:55,880 --> 00:12:59,240 Speaker 1: just getting this deal done with Penn kind of highlights 242 00:12:59,320 --> 00:13:03,080 Speaker 1: there is a lot of value associated with the ESPN brand, 243 00:13:03,480 --> 00:13:05,920 Speaker 1: but the reality is it's not the profit engine that 244 00:13:05,960 --> 00:13:09,000 Speaker 1: it used to be for the Walt Disney company. Walt 245 00:13:09,040 --> 00:13:11,640 Speaker 1: Disney reports earnings after the close today. I think one 246 00:13:11,679 --> 00:13:14,720 Speaker 1: of the many topics you and the analysts investors will 247 00:13:14,720 --> 00:13:17,560 Speaker 1: want to discuss with management is the future of ESPN. 248 00:13:18,040 --> 00:13:20,880 Speaker 1: What what's the current thinking here about the future of ESPN. 249 00:13:22,080 --> 00:13:24,839 Speaker 7: Yeah, that is you know, obviously going to be front 250 00:13:24,840 --> 00:13:29,000 Speaker 7: and center, Paul. So ESPN, it's it's been a real 251 00:13:29,600 --> 00:13:31,880 Speaker 7: roller coaster here, right. So this used to bring in, 252 00:13:31,880 --> 00:13:34,040 Speaker 7: as you pointed out, about thirty thirty five percent of 253 00:13:34,160 --> 00:13:38,040 Speaker 7: the whole operating profits of Disney, but for the past 254 00:13:38,040 --> 00:13:40,800 Speaker 7: few years they've kind of had this this double whammy, right, 255 00:13:40,840 --> 00:13:44,160 Speaker 7: So they do generate about thirteen billion dollars in revenue, 256 00:13:44,200 --> 00:13:46,920 Speaker 7: thirteen to fourteen billion dollars in revenue, but cord cutting 257 00:13:46,960 --> 00:13:49,480 Speaker 7: is kind of pressuring that top line. And then you 258 00:13:49,600 --> 00:13:52,079 Speaker 7: have rising sports costs, so about nine nine and a 259 00:13:52,120 --> 00:13:55,240 Speaker 7: half billion dollars in sports rights fees every year. So 260 00:13:55,280 --> 00:13:58,599 Speaker 7: again that's growing and that's pressuring the bottom line. So 261 00:13:58,880 --> 00:14:02,280 Speaker 7: they're kind of press shout on both sides there, and 262 00:14:02,320 --> 00:14:04,800 Speaker 7: the writing on the wall is clear, and Bob Biger 263 00:14:04,800 --> 00:14:07,400 Speaker 7: has acknowledged this many times. He knows that he has 264 00:14:07,480 --> 00:14:10,000 Speaker 7: to take ESPN over the top. They have to go 265 00:14:10,160 --> 00:14:12,880 Speaker 7: all in as far as streaming is concerned. So it's 266 00:14:12,920 --> 00:14:15,079 Speaker 7: not a question of when. It's a it's not a 267 00:14:15,160 --> 00:14:17,440 Speaker 7: question of if, it's a question of when. But again, 268 00:14:17,480 --> 00:14:19,480 Speaker 7: there are so many different things that need to be 269 00:14:19,560 --> 00:14:21,480 Speaker 7: kind of ironed out. Because there's a new deal that's 270 00:14:21,520 --> 00:14:24,680 Speaker 7: coming up with the NBA, there are existing TV deals 271 00:14:24,720 --> 00:14:28,120 Speaker 7: in place, so again it's it's not going to be easy, 272 00:14:28,120 --> 00:14:30,280 Speaker 7: but we'll have to wait and see what what bar 273 00:14:30,360 --> 00:14:31,200 Speaker 7: Biger says. 274 00:14:31,120 --> 00:14:33,600 Speaker 4: In speaking of how the NBA rights is the next 275 00:14:33,640 --> 00:14:36,280 Speaker 4: big renewal that is going to happen. The current deal, 276 00:14:36,320 --> 00:14:38,520 Speaker 4: like you were talking about ESPN and Turner does end 277 00:14:38,560 --> 00:14:40,800 Speaker 4: after the twenty twenty four and twenty twenty five season, 278 00:14:40,840 --> 00:14:43,160 Speaker 4: what do you think most likely would come out of that. 279 00:14:44,600 --> 00:14:48,280 Speaker 7: Yeah, so there's been again a lot of interest from 280 00:14:48,760 --> 00:14:52,240 Speaker 7: many parties, not just the media owners, not just Disney 281 00:14:52,240 --> 00:14:55,160 Speaker 7: and Turner. NBC wants to get involved. And then of 282 00:14:55,200 --> 00:14:57,560 Speaker 7: course you have the peroneal question with the tech giants. 283 00:14:57,640 --> 00:15:01,600 Speaker 7: Will Amazon, Apple and Google make this big play? We 284 00:15:01,640 --> 00:15:03,960 Speaker 7: know Amazon has not been shy about getting into the 285 00:15:04,000 --> 00:15:08,720 Speaker 7: sports sports arena. They already have Thursday Night Football. Again, 286 00:15:08,800 --> 00:15:11,720 Speaker 7: Apple is dabbling a little bit with MLS, so it's 287 00:15:11,720 --> 00:15:13,400 Speaker 7: going to be interesting to see. And Google, of course 288 00:15:13,440 --> 00:15:18,080 Speaker 7: has that big YouTube Sunday ticket deal. So they're all 289 00:15:18,160 --> 00:15:22,520 Speaker 7: already made bets in the sports rights field. So it's 290 00:15:22,560 --> 00:15:23,960 Speaker 7: going to be interesting to see whether they want to 291 00:15:23,960 --> 00:15:26,120 Speaker 7: do the same thing with NBA. Now, NBA is a 292 00:15:26,160 --> 00:15:30,960 Speaker 7: brand that travels globally. It also appeals to young males, 293 00:15:31,000 --> 00:15:33,160 Speaker 7: which is really a coveted audience when it comes to, 294 00:15:33,400 --> 00:15:37,840 Speaker 7: you know, advertising, so that you know, those deals negotiations 295 00:15:37,880 --> 00:15:39,640 Speaker 7: are going to be really really interesting to watch. 296 00:15:40,120 --> 00:15:42,840 Speaker 1: Hey, Brian, this deal with the walta Is company, to 297 00:15:42,920 --> 00:15:49,200 Speaker 1: me highlights just the growth and the tractors of sports betting. 298 00:15:49,560 --> 00:15:51,680 Speaker 1: Where are we in the evolution of sports betting? You 299 00:15:51,680 --> 00:15:53,520 Speaker 1: said thirteen states, haven't you know? 300 00:15:53,560 --> 00:15:55,800 Speaker 8: It's more like thirty five states with some form of 301 00:15:55,840 --> 00:15:58,960 Speaker 8: it and over two dozen that have online sports betting, 302 00:15:58,960 --> 00:16:02,040 Speaker 8: which is by fourth the biggest tributor. So it's it's 303 00:16:02,200 --> 00:16:03,200 Speaker 8: rapidly growing things. 304 00:16:03,280 --> 00:16:06,720 Speaker 1: And so what's the how does it change economics of Vegas? 305 00:16:06,720 --> 00:16:08,880 Speaker 1: The sports books in Vegas? Some I like to just 306 00:16:08,880 --> 00:16:11,920 Speaker 1: PLoP myself down the sports book at Caesars, sit there 307 00:16:11,960 --> 00:16:14,840 Speaker 1: for a day and just watch sports. What's going on 308 00:16:14,880 --> 00:16:15,160 Speaker 1: there now? 309 00:16:15,200 --> 00:16:17,560 Speaker 8: Yeah, I think the brick and mortar sports book historically 310 00:16:17,560 --> 00:16:20,920 Speaker 8: sports bedding has only been about two percent of gaming revenue. 311 00:16:20,960 --> 00:16:23,800 Speaker 8: That's very different than online, which is really not as 312 00:16:23,800 --> 00:16:25,520 Speaker 8: big in the VAD. It's very big in states like 313 00:16:25,560 --> 00:16:28,520 Speaker 8: New York and New Jersey, and that's really where we've 314 00:16:28,520 --> 00:16:32,320 Speaker 8: seen this penetration opportunity is the online part of sports betting. 315 00:16:32,760 --> 00:16:35,480 Speaker 1: So it's and so the growth of that business. I mean, 316 00:16:35,520 --> 00:16:37,120 Speaker 1: it's a long term growth story, right. 317 00:16:37,000 --> 00:16:38,880 Speaker 8: It's longer term. I mean, if you get to the 318 00:16:38,920 --> 00:16:41,760 Speaker 8: five hundred million to a billion dollar in long term 319 00:16:41,760 --> 00:16:45,400 Speaker 8: annualized EBITDAT potential they see from this deal, it will 320 00:16:45,440 --> 00:16:47,320 Speaker 8: take some time to get there. There'll be some upfront 321 00:16:47,600 --> 00:16:51,080 Speaker 8: customer acquisition marketing costs a lot of money going through 322 00:16:51,120 --> 00:16:54,760 Speaker 8: Disney and through through I should say through ESPN. But 323 00:16:54,880 --> 00:16:57,600 Speaker 8: you know, there is enormous potential after getting to an 324 00:16:57,600 --> 00:16:58,760 Speaker 8: additional upfront spend. 325 00:16:59,000 --> 00:17:01,240 Speaker 1: Hey, you think we got about thirty seconds left? Will 326 00:17:01,320 --> 00:17:04,760 Speaker 1: Bob Iger on the call tonight address succession plans? 327 00:17:05,800 --> 00:17:08,760 Speaker 7: I certainly hope he does. And this has been such 328 00:17:08,760 --> 00:17:11,720 Speaker 7: a paranial pain point for Disney. I mean, they do 329 00:17:11,800 --> 00:17:14,639 Speaker 7: have another three and a half years with Bob Iygers. 330 00:17:14,640 --> 00:17:16,440 Speaker 7: I think there is some near drum stability, but yeah, 331 00:17:17,320 --> 00:17:19,880 Speaker 7: it still remains this biggest question mark for Disney. 332 00:17:20,040 --> 00:17:22,639 Speaker 1: Yeah, it's just crazy. You know, he was doing so 333 00:17:22,720 --> 00:17:25,439 Speaker 1: well with that succession planning for a while there and 334 00:17:25,440 --> 00:17:28,280 Speaker 1: then it all fell apart, and nobody really knows why 335 00:17:28,400 --> 00:17:30,600 Speaker 1: other than he likes a job and he doesn't want 336 00:17:30,600 --> 00:17:32,760 Speaker 1: to give it up, as simple as that. So if 337 00:17:32,760 --> 00:17:35,080 Speaker 1: you're looking to be a successor, good luck. Keith rung 338 00:17:35,119 --> 00:17:38,480 Speaker 1: Onathan and Brian Egger. They cover the media, they cover 339 00:17:38,560 --> 00:17:42,399 Speaker 1: the gaming spaces respectively for Bloomberg Intelligence to really the 340 00:17:42,440 --> 00:17:45,800 Speaker 1: smartest voices out there on their respective industries. And if 341 00:17:45,840 --> 00:17:47,960 Speaker 1: you want to get access to their research, it's really simple. 342 00:17:47,960 --> 00:17:50,320 Speaker 1: If you've got a Bloomberg terminal, b I go on 343 00:17:50,359 --> 00:17:53,000 Speaker 1: the terminal that I'll take you to Bloomberg Intelligence. We've 344 00:17:53,040 --> 00:17:56,480 Speaker 1: got cover twelve hundred companies, two thousand companies, you know, 345 00:17:56,480 --> 00:18:00,280 Speaker 1: one hundred and twenty industries, four hundred analysts are lost 346 00:18:00,600 --> 00:18:03,280 Speaker 1: the globe, and they've got a covered soup to nuts. 347 00:18:03,280 --> 00:18:06,560 Speaker 1: So Brian and Keith bring us up to date on 348 00:18:06,840 --> 00:18:08,480 Speaker 1: Disney and Penn Gaming. 349 00:18:08,800 --> 00:18:11,919 Speaker 6: You're listening to the tape. Catch are live program Bloomberg 350 00:18:12,000 --> 00:18:15,600 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio. The 351 00:18:15,640 --> 00:18:18,880 Speaker 6: tune in app, Bloomberg dot Com and the Bloomberg Business App. 352 00:18:18,920 --> 00:18:21,719 Speaker 6: You can also listen live on Amazon Alexa from our 353 00:18:21,720 --> 00:18:26,800 Speaker 6: flagship New York station. Just say Alexa, play Bloomberg eleven thirty. 354 00:18:27,920 --> 00:18:31,000 Speaker 1: Does one have the courage to be in this market? 355 00:18:31,080 --> 00:18:35,240 Speaker 1: Phil Palumbo, Founder, CEO and CIO of Plumbo Wealth Management. So, Phil, 356 00:18:35,320 --> 00:18:38,040 Speaker 1: after disastrous twenty twenty two, investors are doing a little 357 00:18:38,040 --> 00:18:41,399 Speaker 1: bit better this year, a good first, you know, seven 358 00:18:41,440 --> 00:18:43,000 Speaker 1: months plus. Now what do we do? 359 00:18:44,760 --> 00:18:48,560 Speaker 5: The bigger question for me is why didn't we get 360 00:18:48,560 --> 00:18:50,920 Speaker 5: a recession yet? Right? So we think about coming into 361 00:18:50,960 --> 00:18:56,000 Speaker 5: twenty twenty three, it was recession fears. Now it's recession delayed, 362 00:18:56,440 --> 00:18:57,959 Speaker 5: and again, why do we get Why do we get 363 00:18:57,960 --> 00:19:01,080 Speaker 5: a recession? So understanding that it's in important in my view, 364 00:19:01,640 --> 00:19:04,760 Speaker 5: I look at it like there are three acts that happened. 365 00:19:04,760 --> 00:19:07,240 Speaker 5: There was an American Rescue Act, there was the Infrastructure Act, 366 00:19:07,280 --> 00:19:09,360 Speaker 5: and then there was the Inflation Act. All of that 367 00:19:09,520 --> 00:19:13,800 Speaker 5: generated money into the economy for building infrastructure, et cetera, 368 00:19:14,359 --> 00:19:19,119 Speaker 5: which really created this cushion within the economy. Because anybody's 369 00:19:19,160 --> 00:19:21,680 Speaker 5: been in a business for a good amount of time 370 00:19:22,040 --> 00:19:24,680 Speaker 5: knows that when you have leading indicators doing what they're doing. 371 00:19:24,960 --> 00:19:27,159 Speaker 5: When you have inverted yield curve and you have a 372 00:19:27,240 --> 00:19:30,679 Speaker 5: FED whereas moved rates up as aggressively as he has, 373 00:19:31,240 --> 00:19:34,760 Speaker 5: you always have a really bad recession. And we just 374 00:19:34,800 --> 00:19:38,359 Speaker 5: haven't gotten that yet. So what investors have to understand 375 00:19:38,440 --> 00:19:40,120 Speaker 5: is that you have to be cautious in the short 376 00:19:40,200 --> 00:19:42,040 Speaker 5: term because of what I just said with the FED 377 00:19:42,080 --> 00:19:45,840 Speaker 5: and all those things that normally precede a recession, but 378 00:19:45,960 --> 00:19:47,919 Speaker 5: with these other parts that I think a lot of 379 00:19:47,960 --> 00:19:50,840 Speaker 5: prognosticators missed, which is this money that's been flooded into 380 00:19:50,840 --> 00:19:54,320 Speaker 5: the economy. Now deficits have gone up, deficits up, it's 381 00:19:54,320 --> 00:19:56,560 Speaker 5: tough to really get a recession because the government's spending. 382 00:19:57,160 --> 00:19:59,920 Speaker 5: So you can't sit on your hands and just watch 383 00:20:00,080 --> 00:20:02,959 Speaker 5: the market go up. You have to be active. But 384 00:20:03,160 --> 00:20:05,600 Speaker 5: these are really kind of the push and pull that's 385 00:20:05,640 --> 00:20:06,399 Speaker 5: going on today. 386 00:20:06,600 --> 00:20:08,920 Speaker 4: So if you look at the US stock market obviously 387 00:20:08,960 --> 00:20:11,359 Speaker 4: as a forward looking mechanism, what is it telling us 388 00:20:11,400 --> 00:20:13,760 Speaker 4: that investors are betting ahead for the economy. 389 00:20:14,920 --> 00:20:17,159 Speaker 5: So investors are betting ahead two things right. One is 390 00:20:17,920 --> 00:20:20,800 Speaker 5: AI so AI. What you talked about this for is 391 00:20:20,880 --> 00:20:24,680 Speaker 5: for real, it'll be productive for companies on the front end, 392 00:20:24,960 --> 00:20:28,080 Speaker 5: which will expand margins and that'll be great for EPs 393 00:20:28,119 --> 00:20:29,800 Speaker 5: as we think about twenty four to twenty five and 394 00:20:29,840 --> 00:20:33,000 Speaker 5: twenty six. That's number one. Number two. Markets are betting 395 00:20:33,080 --> 00:20:35,199 Speaker 5: that inflation is going to come down. The FED is 396 00:20:35,200 --> 00:20:39,160 Speaker 5: going to be done with raising rates, and because of that, 397 00:20:39,800 --> 00:20:43,160 Speaker 5: interest rates will come down and that'll be beneficial to stop. 398 00:20:43,240 --> 00:20:46,439 Speaker 5: So that's what market participate, market participants are betting on. 399 00:20:47,800 --> 00:20:50,320 Speaker 1: So, Phil, we're looking at WTI crude oil up another 400 00:20:50,400 --> 00:20:55,119 Speaker 1: one percent today, eighty three dollars seventy nine cents. Is 401 00:20:55,119 --> 00:20:56,480 Speaker 1: there an energy play out there you like? 402 00:20:57,720 --> 00:21:00,520 Speaker 5: I do so so I like Occident Petroleum. I like 403 00:21:00,560 --> 00:21:03,320 Speaker 5: the energy sector just in general. I think the economy here, 404 00:21:03,560 --> 00:21:06,280 Speaker 5: you know, does seem to be reaccelerating here a bit, 405 00:21:06,640 --> 00:21:09,320 Speaker 5: and you know with that commodities are starting to improve. 406 00:21:09,400 --> 00:21:12,280 Speaker 5: You can see it in the pricing from a technical standpoint. 407 00:21:12,640 --> 00:21:15,119 Speaker 5: So Oxy is a company that throws off really strong 408 00:21:15,200 --> 00:21:18,560 Speaker 5: free cast flow, and as the price accruede continues to rise, 409 00:21:18,840 --> 00:21:21,560 Speaker 5: free cast flow becomes that much better for Oxy and 410 00:21:21,600 --> 00:21:24,080 Speaker 5: many other energy companies as well. So that's a play 411 00:21:24,080 --> 00:21:24,680 Speaker 5: that I like a lot. 412 00:21:24,880 --> 00:21:26,000 Speaker 4: What about Nike? 413 00:21:28,160 --> 00:21:32,679 Speaker 5: Yeah, So Nike, as we all know is a wonderful brand. 414 00:21:32,760 --> 00:21:35,800 Speaker 5: It's trading below it's intrinsic value by about twenty twenty 415 00:21:35,840 --> 00:21:39,199 Speaker 5: five percent. Recently, it's come down in value from a 416 00:21:39,200 --> 00:21:42,159 Speaker 5: pricing standpoint. I mean, the return on investment capital on 417 00:21:42,359 --> 00:21:45,400 Speaker 5: average has been fifty percent the past three years. That's 418 00:21:45,480 --> 00:21:47,840 Speaker 5: continued to be projected to be at that level or 419 00:21:47,880 --> 00:21:50,359 Speaker 5: even greater than that. Their EPs is double over the 420 00:21:50,400 --> 00:21:54,160 Speaker 5: past ten years. The story about Nike is not going away. 421 00:21:54,200 --> 00:21:57,240 Speaker 5: I love their direct a consumer strategy, you know, eliminating 422 00:21:57,240 --> 00:21:58,560 Speaker 5: in the middle man. I think that's really going to 423 00:21:58,600 --> 00:22:00,679 Speaker 5: work well and be profitable to the company me. So 424 00:22:01,000 --> 00:22:03,400 Speaker 5: we started buying into that about two or three days ago. 425 00:22:03,800 --> 00:22:06,080 Speaker 5: We bought about a seventy point seventy five percent position 426 00:22:06,119 --> 00:22:08,800 Speaker 5: within client's portfolios. You know, we will add if there's 427 00:22:08,800 --> 00:22:11,280 Speaker 5: a continued weakness in that particular area, which may happen 428 00:22:11,320 --> 00:22:11,919 Speaker 5: as a result of. 429 00:22:12,000 --> 00:22:14,440 Speaker 4: China weakness and the latest results that we had from 430 00:22:14,520 --> 00:22:18,080 Speaker 4: Nike toward the end of June, obviously seeing that sales strength, 431 00:22:18,119 --> 00:22:20,280 Speaker 4: but this is a very discretionary company. If these are 432 00:22:20,320 --> 00:22:22,840 Speaker 4: what consumers are going in and buying, especially these niche 433 00:22:22,840 --> 00:22:25,640 Speaker 4: types of brands, does it really tell us that there's 434 00:22:25,680 --> 00:22:27,120 Speaker 4: a recession on the horizon. 435 00:22:28,640 --> 00:22:30,840 Speaker 5: Yeah, I mean, that's the thing. So it's kind of 436 00:22:30,920 --> 00:22:32,879 Speaker 5: if you listen to Target and you listen to Tyson 437 00:22:32,920 --> 00:22:35,400 Speaker 5: Foods and what they're saying, there is concern that the 438 00:22:35,440 --> 00:22:38,080 Speaker 5: consumer is abating a bit. But if you listen to 439 00:22:38,240 --> 00:22:40,679 Speaker 5: what Amazon is talking about, you know, which is one 440 00:22:40,680 --> 00:22:43,280 Speaker 5: of the strongest areas where you're seeing consumers buy. You know, 441 00:22:43,280 --> 00:22:45,440 Speaker 5: their numbers are very strong. So it goes back to 442 00:22:45,840 --> 00:22:48,280 Speaker 5: said before, you know, the jobs numbers are very strong. 443 00:22:48,280 --> 00:22:50,760 Speaker 5: If you have the jobs numbers that continue to be strong, 444 00:22:51,200 --> 00:22:53,880 Speaker 5: consumers are getting a paycheck. Consumers are getting a paychecks 445 00:22:53,880 --> 00:22:55,960 Speaker 5: and then go out there and spend money. And that's what 446 00:22:55,960 --> 00:22:57,600 Speaker 5: we're going to continue see going forward. A lot of 447 00:22:57,680 --> 00:23:00,760 Speaker 5: Nike is around China. China's strength out of COVID hasn't 448 00:23:00,760 --> 00:23:03,000 Speaker 5: been as great as many as people anticipated, and a 449 00:23:03,000 --> 00:23:08,680 Speaker 5: lot of Nike's EPs growth, we're estimating will come out 450 00:23:08,720 --> 00:23:10,879 Speaker 5: of China. So we really need to see a strong 451 00:23:10,960 --> 00:23:13,040 Speaker 5: China for Nike. It really work as we think about 452 00:23:13,119 --> 00:23:14,680 Speaker 5: Nike over the next three to five years. 453 00:23:14,840 --> 00:23:16,640 Speaker 1: We're gonna get some inflation data in the next couple 454 00:23:16,680 --> 00:23:19,360 Speaker 1: of days. Where are you on kind of your inflation 455 00:23:20,000 --> 00:23:22,000 Speaker 1: watch here for this economy. 456 00:23:22,800 --> 00:23:24,600 Speaker 5: So it goes back to what you're asking before about 457 00:23:24,640 --> 00:23:28,280 Speaker 5: the market overall. So the market overall is anticipating inflation 458 00:23:28,440 --> 00:23:32,280 Speaker 5: to continue to decelerate and to FED to pause and 459 00:23:32,320 --> 00:23:34,560 Speaker 5: be done. I don't know if it's going to be 460 00:23:34,600 --> 00:23:37,720 Speaker 5: that easy. I do believe inflation has come down quite 461 00:23:37,720 --> 00:23:40,840 Speaker 5: preciplusly from its peak, but I do think we may 462 00:23:40,920 --> 00:23:45,359 Speaker 5: get sticky because of housing and wage pressures as we 463 00:23:45,400 --> 00:23:49,320 Speaker 5: think about the CPI prints going forward, as it relates 464 00:23:49,320 --> 00:23:52,280 Speaker 5: to core and if you take a if you take 465 00:23:52,440 --> 00:23:56,400 Speaker 5: non core regular CPI which includes food and energy. Now, 466 00:23:56,440 --> 00:23:59,880 Speaker 5: with energy prices increasing, you may actually see that number disappoint. 467 00:24:00,119 --> 00:24:02,280 Speaker 5: So you know, if you're interesting, if you look at 468 00:24:02,280 --> 00:24:04,520 Speaker 5: the ten year treasury, it's holding that four percent number. 469 00:24:04,560 --> 00:24:06,720 Speaker 5: I mean there's I mean right now, there's a huge 470 00:24:06,760 --> 00:24:10,320 Speaker 5: short on the third year based on various commentary that 471 00:24:10,359 --> 00:24:13,040 Speaker 5: we've all probably know about and been reading about. So 472 00:24:13,640 --> 00:24:17,199 Speaker 5: you see it. Everybody's waiting for this print tomorrow. I 473 00:24:17,240 --> 00:24:19,760 Speaker 5: think it's going to be a print that's not going 474 00:24:19,800 --> 00:24:22,760 Speaker 5: to be good, and concerned a lot of market participants 475 00:24:22,760 --> 00:24:24,840 Speaker 5: that maybe the FED is not done. 476 00:24:25,119 --> 00:24:27,240 Speaker 4: We only have about forty five seconds left. You were 477 00:24:27,280 --> 00:24:30,280 Speaker 4: talking about occidental petroleum earlier. I'm curious when you're seeing 478 00:24:30,320 --> 00:24:33,320 Speaker 4: this big rebound, especially to day and energy stocks up 479 00:24:33,320 --> 00:24:35,479 Speaker 4: about one half percent in the S and P five hundred, 480 00:24:35,720 --> 00:24:37,359 Speaker 4: do you think we've gotten to a range where it's 481 00:24:37,359 --> 00:24:40,320 Speaker 4: a contrarian indicator, especially with the amount of massive outflows 482 00:24:40,320 --> 00:24:42,359 Speaker 4: we've seen in energy, to where investors are going to 483 00:24:42,400 --> 00:24:44,000 Speaker 4: come back in and start buying those shares. 484 00:24:44,760 --> 00:24:47,000 Speaker 5: Yeah. Remember energy is one of the worst performing sectors 485 00:24:47,040 --> 00:24:49,960 Speaker 5: you had to date, amongst healthcare and staples, Right, So 486 00:24:50,480 --> 00:24:54,119 Speaker 5: if we started to see an area where there's value 487 00:24:54,160 --> 00:24:57,359 Speaker 5: relative to technology consumed discretionary, which are sectors that have 488 00:24:57,400 --> 00:24:59,320 Speaker 5: performed really well you had to date, if you're going 489 00:24:59,359 --> 00:25:03,080 Speaker 5: to rebalance folio, if there's concerns about inflation, know, then 490 00:25:03,680 --> 00:25:06,199 Speaker 5: then maybe energy is a place where you want to be. 491 00:25:06,800 --> 00:25:08,960 Speaker 5: And again we'll see it tomorre with the print and 492 00:25:09,160 --> 00:25:11,520 Speaker 5: how that trend's going forward. But I think that's what 493 00:25:11,520 --> 00:25:13,119 Speaker 5: we're seeing with more participants. 494 00:25:13,400 --> 00:25:15,600 Speaker 1: Phil, thanks so much for joining us. I always appreciate 495 00:25:15,840 --> 00:25:18,680 Speaker 1: getting a few minutes of your time. Phil Palumbo, he's 496 00:25:18,680 --> 00:25:22,159 Speaker 1: the founder, CEO, and CIO. I think he's pretty much 497 00:25:22,200 --> 00:25:22,720 Speaker 1: in charge there. 498 00:25:22,840 --> 00:25:23,640 Speaker 4: He's doing it all. 499 00:25:23,760 --> 00:25:25,840 Speaker 1: And he's got his name on the door Plumbo Wealth Management, 500 00:25:25,880 --> 00:25:29,440 Speaker 1: so that says it all still constructive on this market, 501 00:25:29,440 --> 00:25:30,960 Speaker 1: and look at he's looking a little bit on the 502 00:25:31,080 --> 00:25:34,080 Speaker 1: energy side, a little bit on the consumer side with Nike. 503 00:25:35,320 --> 00:25:38,720 Speaker 6: You're listening to the team Ken's our live program Bloomberg 504 00:25:38,760 --> 00:25:42,119 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot com, 505 00:25:42,240 --> 00:25:45,359 Speaker 6: the iHeartRadio app and the Bloomberg Business App, or listen 506 00:25:45,440 --> 00:25:47,560 Speaker 6: on demand wherever you get your podcasts. 507 00:25:50,080 --> 00:25:51,880 Speaker 9: Mark, we really appreciate you joining us. 508 00:25:51,960 --> 00:25:55,480 Speaker 2: This is a very powerful vehicle with four hundred and 509 00:25:55,520 --> 00:25:58,240 Speaker 2: fifty miles range, but also a very high price tag. 510 00:25:58,400 --> 00:26:00,200 Speaker 9: Who are you aiming this product? 511 00:26:00,520 --> 00:26:02,280 Speaker 10: Well, if you look at the current Escalade, you know 512 00:26:02,320 --> 00:26:05,560 Speaker 10: we sold over a million units and you know, one 513 00:26:05,600 --> 00:26:09,520 Speaker 10: out of every three of these SUVs in this luxury 514 00:26:09,560 --> 00:26:12,879 Speaker 10: segment is an Escalade. So we've got a very successful brand. 515 00:26:13,800 --> 00:26:16,280 Speaker 10: It's been you know, an unbelievable vehicle for Cadillac and 516 00:26:16,359 --> 00:26:19,720 Speaker 10: General Motors. But this has added to business. So we 517 00:26:19,800 --> 00:26:24,280 Speaker 10: know there's people that are wanting an electric three row suv, 518 00:26:24,359 --> 00:26:26,680 Speaker 10: full size suv. We're going to be the first ones 519 00:26:26,720 --> 00:26:29,720 Speaker 10: that really bring it here with an iconic brand, so 520 00:26:30,040 --> 00:26:33,080 Speaker 10: we know this is in addition to our internal combustion 521 00:26:33,560 --> 00:26:36,320 Speaker 10: engine escalating. You can see it as the next step 522 00:26:36,320 --> 00:26:39,000 Speaker 10: in the design language for Cadillac, both inside and out, 523 00:26:39,200 --> 00:26:41,240 Speaker 10: and so this is going to be right on the 524 00:26:41,840 --> 00:26:46,080 Speaker 10: cutting edge of everything. It's the Escalade standard of the world. 525 00:26:45,840 --> 00:26:46,399 Speaker 11: It really is. 526 00:26:46,640 --> 00:26:50,240 Speaker 2: So you already have the Hummer though, which is definitely 527 00:26:50,280 --> 00:26:53,080 Speaker 2: on the cutting edge of everything, right, and early adopters 528 00:26:53,320 --> 00:26:56,080 Speaker 2: who are waiting for a big electric vehicle, I'm assuming 529 00:26:56,119 --> 00:26:56,959 Speaker 2: went out and got that. 530 00:26:57,560 --> 00:26:59,640 Speaker 9: Who's left it to buy the Escalade at one hundred 531 00:26:59,640 --> 00:27:00,760 Speaker 9: and thirty thousand to start. 532 00:27:00,880 --> 00:27:02,760 Speaker 10: Yeah, I was going to say, well, the ultimate platform 533 00:27:02,760 --> 00:27:05,720 Speaker 10: here that we're talking about is very flexible and it's 534 00:27:05,840 --> 00:27:08,879 Speaker 10: very different than the suv offered from Hummer, and so 535 00:27:09,000 --> 00:27:12,960 Speaker 10: you'll see it in the proportions here where we really 536 00:27:12,960 --> 00:27:15,840 Speaker 10: are going after efficiency. With four hundred and fifty miles 537 00:27:15,840 --> 00:27:18,680 Speaker 10: of range, that's a big deal for families and people 538 00:27:18,720 --> 00:27:22,360 Speaker 10: who travel, So it's a big range vehicle, but it's 539 00:27:22,359 --> 00:27:25,320 Speaker 10: also seven hud and fifty horsepower. The Hummers are in 540 00:27:25,359 --> 00:27:28,920 Speaker 10: the thousand horsepower stand in that part of the part 541 00:27:28,960 --> 00:27:30,679 Speaker 10: of the market there, so it's a little bit different 542 00:27:30,840 --> 00:27:33,919 Speaker 10: customer it's very different from a duty cycle standpoint, but 543 00:27:33,960 --> 00:27:35,919 Speaker 10: it's still built on the twenty four mod pack that 544 00:27:35,960 --> 00:27:38,240 Speaker 10: we use in our datay electric truck platforms. 545 00:27:38,400 --> 00:27:42,600 Speaker 2: There has been some criticism about these big battery packs. 546 00:27:43,080 --> 00:27:46,560 Speaker 2: Bloomberg New Energy Finance, for example, wrote that you're using 547 00:27:46,560 --> 00:27:49,600 Speaker 2: a lot of lithium that maybe should be left for 548 00:27:49,800 --> 00:27:51,159 Speaker 2: the smaller electric vehicles. 549 00:27:51,160 --> 00:27:52,080 Speaker 9: How do you respond to that? 550 00:27:52,440 --> 00:27:54,560 Speaker 10: Well, General Motors is going to make both number one, 551 00:27:54,640 --> 00:27:56,600 Speaker 10: So we're going to make everything from the Bolt with 552 00:27:56,680 --> 00:27:59,760 Speaker 10: an LTM based pack here as we bring it back online, 553 00:28:00,359 --> 00:28:02,800 Speaker 10: to the Equinox to the Blazer. So those are right 554 00:28:02,840 --> 00:28:06,159 Speaker 10: in the biggest segments in the world at price points 555 00:28:06,160 --> 00:28:08,800 Speaker 10: that are you know, the most affordable, right in the 556 00:28:08,800 --> 00:28:11,439 Speaker 10: wheelhouse of those big buying segments. So we're going to 557 00:28:11,480 --> 00:28:14,679 Speaker 10: do that too. But you know, technology changes, and so 558 00:28:14,760 --> 00:28:16,520 Speaker 10: anybody that thinks that we're going to have the same 559 00:28:16,560 --> 00:28:20,760 Speaker 10: technology even a year from now chemistry rise with our 560 00:28:20,840 --> 00:28:24,639 Speaker 10: battery systems across the whole industry isn't thinking about it 561 00:28:24,680 --> 00:28:28,240 Speaker 10: quite right. I think it's been mentioned before that the 562 00:28:28,280 --> 00:28:30,679 Speaker 10: telem of communications industry, there is all these people that 563 00:28:30,720 --> 00:28:35,320 Speaker 10: were fearful of copper, right that all changed, right and 564 00:28:35,359 --> 00:28:37,200 Speaker 10: so you get into silicon, and you get into chips, 565 00:28:37,200 --> 00:28:39,840 Speaker 10: you get into all those things that are new technologies 566 00:28:40,120 --> 00:28:43,520 Speaker 10: on a breaking transformation of the industry. And I can 567 00:28:43,560 --> 00:28:46,280 Speaker 10: tell you the history books will see this as just 568 00:28:46,320 --> 00:28:47,000 Speaker 10: the first step. 569 00:28:47,120 --> 00:28:49,680 Speaker 2: All Right, we're talking again with Mark Roy's, president of 570 00:28:49,720 --> 00:28:53,120 Speaker 2: General Motors, at the introduction of their brand new Cadillacs 571 00:28:53,200 --> 00:28:56,240 Speaker 2: brand new ev Escalade IQ. 572 00:28:56,720 --> 00:28:59,040 Speaker 9: And you know I have driven. 573 00:28:58,800 --> 00:29:03,440 Speaker 2: The Escalade, the v with also about seven hundred horsepower. Right, 574 00:29:03,440 --> 00:29:05,200 Speaker 2: it's got a big V eight eats up a lot 575 00:29:05,240 --> 00:29:07,600 Speaker 2: of gas. That's the problem you're trying to solve with this. 576 00:29:07,720 --> 00:29:09,520 Speaker 2: But there are still gonna be people out there who 577 00:29:09,560 --> 00:29:11,400 Speaker 2: want the V eight. How long are you going to 578 00:29:11,480 --> 00:29:16,240 Speaker 2: sell the internal combustion engine Escalade next to the Escalade IQ. 579 00:29:16,680 --> 00:29:19,880 Speaker 10: Well, are very different vehicles again in terms of the package. 580 00:29:19,920 --> 00:29:22,040 Speaker 10: You know, we've got a huge amount of storage in 581 00:29:22,080 --> 00:29:24,960 Speaker 10: this vehicle because of what we have up front where 582 00:29:24,960 --> 00:29:27,360 Speaker 10: the engine used to be, and then also a longer 583 00:29:27,360 --> 00:29:29,840 Speaker 10: wheelbase and the second row package is quite different too, 584 00:29:30,200 --> 00:29:32,760 Speaker 10: So you have those things together, they're different vehicles, even 585 00:29:32,800 --> 00:29:35,280 Speaker 10: though sort of the output on a power basis are similar. 586 00:29:35,880 --> 00:29:37,960 Speaker 10: We're going to do both when as long as people 587 00:29:38,000 --> 00:29:40,000 Speaker 10: want both, and so you know, if you look at 588 00:29:40,000 --> 00:29:43,000 Speaker 10: this over the long term horizon, the market and the customer, 589 00:29:43,520 --> 00:29:45,920 Speaker 10: we haven't sold a vehicle like this ever, the market 590 00:29:45,960 --> 00:29:48,400 Speaker 10: has never seen a vehicle like this. This is the 591 00:29:48,440 --> 00:29:50,840 Speaker 10: first standard of the world, and so we're going to 592 00:29:50,880 --> 00:29:51,600 Speaker 10: see what people do. 593 00:29:52,000 --> 00:29:54,760 Speaker 2: You are going to bring out the Silverado with I 594 00:29:54,760 --> 00:29:57,960 Speaker 2: believe a similar battery pack and range at least as 595 00:29:57,960 --> 00:30:02,200 Speaker 2: an option. Are you seeing price pressure because we're now 596 00:30:02,240 --> 00:30:06,720 Speaker 2: seeing forward capitulate and cut prices. Tesla obviously driving that. 597 00:30:07,080 --> 00:30:08,840 Speaker 2: How do you expect the pricing to work out? 598 00:30:08,880 --> 00:30:09,040 Speaker 5: Well? 599 00:30:09,040 --> 00:30:11,800 Speaker 10: The pricing We're starting with the Silverado with our work truck, 600 00:30:11,880 --> 00:30:15,600 Speaker 10: so you know, our pricing and our ladders and our 601 00:30:15,640 --> 00:30:20,440 Speaker 10: battery capacity and range capacity and duty cycle capacity on 602 00:30:20,520 --> 00:30:24,360 Speaker 10: Silverado and Sierra are going to be for everybody's pocket 603 00:30:24,360 --> 00:30:26,560 Speaker 10: put and price points, so you know, we know where 604 00:30:26,760 --> 00:30:29,040 Speaker 10: people want it from a work truck and our fleet standpoint, 605 00:30:29,360 --> 00:30:31,200 Speaker 10: and then it'll it'll go all the way up through 606 00:30:31,240 --> 00:30:34,520 Speaker 10: the RST, which will you know, again be a high range, 607 00:30:34,840 --> 00:30:37,080 Speaker 10: high module. But you don't have to just do that. 608 00:30:37,360 --> 00:30:40,000 Speaker 10: So we're going to offer those things as options. Cutting 609 00:30:40,000 --> 00:30:43,160 Speaker 10: price though, means that we didn't see it right, And 610 00:30:43,240 --> 00:30:44,880 Speaker 10: I don't think that's true. I think we're right in 611 00:30:44,880 --> 00:30:47,600 Speaker 10: that wheelhouse of what people can afford and want, and so, 612 00:30:47,800 --> 00:30:49,280 Speaker 10: you know, I feel good about our pricing. 613 00:30:49,600 --> 00:30:51,680 Speaker 2: Are these vehicles going to be profitable when you start 614 00:30:51,720 --> 00:30:52,280 Speaker 2: selling them? 615 00:30:52,640 --> 00:30:52,920 Speaker 6: Yes? 616 00:30:53,520 --> 00:30:55,800 Speaker 2: And are you going to be able to make a 617 00:30:55,840 --> 00:30:57,280 Speaker 2: million of them in twenty twenty five? 618 00:30:57,400 --> 00:31:00,640 Speaker 9: Not not the escalade iq T vehicles? 619 00:31:00,720 --> 00:31:03,360 Speaker 10: Yeah, electric vehicles, yeah, I think so. I think we're 620 00:31:03,360 --> 00:31:06,080 Speaker 10: well on our track. You know, we're well. We did 621 00:31:06,080 --> 00:31:08,440 Speaker 10: fifty thousand here the first half a year. That was 622 00:31:08,480 --> 00:31:11,560 Speaker 10: our our target, and we did that. You got to 623 00:31:11,600 --> 00:31:14,800 Speaker 10: bring cell plants along online as we do the assembly 624 00:31:14,840 --> 00:31:18,160 Speaker 10: plans to make these. Our first plant in Lordstown, Ohio 625 00:31:18,560 --> 00:31:21,320 Speaker 10: is now full capacity and running really well on the 626 00:31:21,320 --> 00:31:24,200 Speaker 10: second one will be in spring Hill, Tennessee, right next 627 00:31:24,240 --> 00:31:27,760 Speaker 10: to our lyric facility there, so that's coming online next. 628 00:31:28,000 --> 00:31:30,959 Speaker 10: And the third one will be in Lansing, Michigan, and 629 00:31:30,960 --> 00:31:33,480 Speaker 10: we're just you know, doing the construction on that right now. 630 00:31:33,520 --> 00:31:36,720 Speaker 10: So once we get past the first plant in Lordstown, Ohio, 631 00:31:36,880 --> 00:31:39,640 Speaker 10: we learned how to make them, we do it at volume. 632 00:31:40,040 --> 00:31:43,160 Speaker 10: We duplicate that in spring Hill, and we duplicate that 633 00:31:43,200 --> 00:31:46,040 Speaker 10: in Lansing. So the first ones out here, we knew 634 00:31:46,040 --> 00:31:49,280 Speaker 10: we're going to be, you know, something we've never done before, 635 00:31:49,320 --> 00:31:51,120 Speaker 10: and we tackled that and we're doing it with high 636 00:31:51,200 --> 00:31:53,760 Speaker 10: quality and we're doing it rate. So those are you know, 637 00:31:53,760 --> 00:31:55,080 Speaker 10: that's how you get into volume production. 638 00:31:55,400 --> 00:31:57,840 Speaker 2: I got to ask about the negotiations with the UA, 639 00:31:58,080 --> 00:32:02,680 Speaker 2: w are you prepared to make an expensive investment in 640 00:32:02,760 --> 00:32:05,760 Speaker 2: raising those costs because their demands are I think they 641 00:32:05,800 --> 00:32:07,520 Speaker 2: said pretty audacious. Yeah. 642 00:32:07,560 --> 00:32:10,200 Speaker 10: I can't come on what people say or don't say 643 00:32:10,200 --> 00:32:14,920 Speaker 10: about that. We are negotiating with our represented workforce in 644 00:32:14,960 --> 00:32:17,600 Speaker 10: Earnest as we always do, and we're there to make 645 00:32:17,760 --> 00:32:20,600 Speaker 10: a good agreement, a fair agreement, an agreement that works 646 00:32:20,600 --> 00:32:22,120 Speaker 10: for everybody. And that's all I have to say. 647 00:32:22,360 --> 00:32:24,040 Speaker 9: Mark, thanks very much for your time. Really appreciate. 648 00:32:24,120 --> 00:32:26,360 Speaker 11: Mark rant is a pleasure President. 649 00:32:25,960 --> 00:32:30,000 Speaker 2: Of General Motors talking to us about Cadillacs new Escalade IQ. 650 00:32:30,240 --> 00:32:33,600 Speaker 1: Let's continue a little car talk here, Yes, too bad, 651 00:32:33,600 --> 00:32:37,160 Speaker 1: Matt's not here. Detroit bureau chief for Bloomberg News David 652 00:32:37,160 --> 00:32:40,160 Speaker 1: Welch joins us. So, David, we just heard Matt sitting 653 00:32:40,160 --> 00:32:45,000 Speaker 1: down with the GM president Mark Royce, still sounding really 654 00:32:45,040 --> 00:32:48,280 Speaker 1: confident in hitting some of their electric vehicle production goals. 655 00:32:48,320 --> 00:32:50,840 Speaker 1: I think a million for next year. This is a 656 00:32:51,040 --> 00:32:53,800 Speaker 1: major ramp up that not just GM, but you know 657 00:32:53,840 --> 00:32:57,120 Speaker 1: all of Detroit is making. What's the feeling about this 658 00:32:57,280 --> 00:32:59,280 Speaker 1: industry and as it transitions to EV. 659 00:33:00,680 --> 00:33:03,000 Speaker 11: Yeah, I think a lot of people were skeptical, not 660 00:33:03,120 --> 00:33:06,560 Speaker 11: just of GM, but just of late. We're seeing weakness 661 00:33:06,560 --> 00:33:10,040 Speaker 11: and demand for evs to a certain degree, and that's 662 00:33:10,040 --> 00:33:12,600 Speaker 11: reflected in pricing. In order to keep volumes of Tesla's 663 00:33:12,640 --> 00:33:15,360 Speaker 11: had to cut prices. Other companies like Ford have had 664 00:33:15,360 --> 00:33:19,520 Speaker 11: to follow a suit. Even with price cuts, we've seen 665 00:33:19,560 --> 00:33:24,560 Speaker 11: Tesla volumes drop significantly in China. So everyone's wondering, well, 666 00:33:24,960 --> 00:33:27,000 Speaker 11: if you still goes Tesla, so goes the rest of 667 00:33:27,040 --> 00:33:31,120 Speaker 11: the industry. GM Itselvis had delays and production of its 668 00:33:31,120 --> 00:33:34,360 Speaker 11: catllit lyric when off its first evs, the Hummer, they 669 00:33:34,360 --> 00:33:36,840 Speaker 11: had to ground that for a while they weren't selling 670 00:33:36,840 --> 00:33:38,640 Speaker 11: them due to a recall. So can they really get 671 00:33:38,640 --> 00:33:42,680 Speaker 11: to a million vehicles next year? And what Royce is saying, 672 00:33:42,880 --> 00:33:44,640 Speaker 11: you got to listen to GM's words on this careacter. 673 00:33:44,680 --> 00:33:46,600 Speaker 11: They're saying that they will have the production and they'll 674 00:33:46,600 --> 00:33:49,120 Speaker 11: be able to produce a million in twenty twenty five 675 00:33:49,720 --> 00:33:53,040 Speaker 11: that we're casting they're going to sell them, and they're 676 00:33:53,080 --> 00:33:55,840 Speaker 11: not saying they won't either, But I do think they're 677 00:33:55,880 --> 00:33:58,000 Speaker 11: being a little bit careful about saying that they're going 678 00:33:58,080 --> 00:34:00,560 Speaker 11: to sell the cars. Having the capacity in place and 679 00:34:00,600 --> 00:34:02,520 Speaker 11: the battery plants up and running is a big step. 680 00:34:02,560 --> 00:34:04,960 Speaker 11: But if consumers don't want them, but the prices you're 681 00:34:04,960 --> 00:34:07,040 Speaker 11: going to charge, that's where the risk is. And I 682 00:34:07,080 --> 00:34:09,960 Speaker 11: think that's why investors are kind of taking a wait 683 00:34:10,000 --> 00:34:12,799 Speaker 11: and see on the other car companies that are that 684 00:34:12,840 --> 00:34:13,839 Speaker 11: are trying to get David. 685 00:34:14,120 --> 00:34:16,160 Speaker 1: That's kind of where I wanted to go. I guess 686 00:34:16,160 --> 00:34:19,640 Speaker 1: my question is why is there not the demand in 687 00:34:20,440 --> 00:34:22,759 Speaker 1: how much of it is because of the price, because 688 00:34:22,760 --> 00:34:26,040 Speaker 1: we're seeing price tags that no one has ever seen 689 00:34:26,280 --> 00:34:30,200 Speaker 1: before for a truck, a sedan, and even an escalade, 690 00:34:30,239 --> 00:34:31,719 Speaker 1: just huge increases. 691 00:34:33,120 --> 00:34:38,000 Speaker 11: That's right. Evs are more expensive than gasoline burning vehicles, 692 00:34:38,040 --> 00:34:41,239 Speaker 11: and gasoline burning vehicles are at all time hides and 693 00:34:41,360 --> 00:34:43,279 Speaker 11: pricing right now, even though they've come down a little bit, 694 00:34:43,320 --> 00:34:46,040 Speaker 11: they're still really expensive. I think what's going on in 695 00:34:46,080 --> 00:34:49,120 Speaker 11: the EV market is and Mary Borrow has said this 696 00:34:49,560 --> 00:34:52,359 Speaker 11: for the longest time. EV's have been a second, third, 697 00:34:52,440 --> 00:34:56,880 Speaker 11: fourth car in some affluent family's garage. And it started 698 00:34:56,920 --> 00:34:59,080 Speaker 11: to get beyond that as Tessa came out with Model 699 00:34:59,120 --> 00:35:00,919 Speaker 11: three and Model y. Even those who are not super 700 00:35:01,000 --> 00:35:03,719 Speaker 11: cheap vehicles the Chevy Bolt Nissan Leaf do sell to 701 00:35:03,800 --> 00:35:06,759 Speaker 11: people who it's their only car. But most of the 702 00:35:06,800 --> 00:35:09,040 Speaker 11: EV's out there, and most of Tesla's trucs goes to 703 00:35:09,080 --> 00:35:12,200 Speaker 11: people who have a lot of money. And I think 704 00:35:12,400 --> 00:35:14,600 Speaker 11: you do get to a certain point where there are 705 00:35:14,640 --> 00:35:18,240 Speaker 11: only so many sixty eighty one hundred thousand dollars luxury 706 00:35:18,360 --> 00:35:20,920 Speaker 11: evs that the market can buy. And if you want 707 00:35:20,960 --> 00:35:23,280 Speaker 11: to get back, get past that, past the wealthy people, 708 00:35:23,360 --> 00:35:26,399 Speaker 11: past the early adopters. You need cheap reviews, you need 709 00:35:26,440 --> 00:35:29,440 Speaker 11: more charging out on the highway and that kind of thing. 710 00:35:29,600 --> 00:35:32,479 Speaker 11: And you know, we're seeing all of the we're seeing 711 00:35:32,480 --> 00:35:35,520 Speaker 11: everybody go to Tesla's charging standard that gives everybody more 712 00:35:35,560 --> 00:35:37,960 Speaker 11: access to charging. And then you saw seven car companies 713 00:35:38,000 --> 00:35:41,839 Speaker 11: come together to put money, you know, pool their resources 714 00:35:41,920 --> 00:35:45,759 Speaker 11: and build out on the highways charging infrastructure. So it 715 00:35:45,800 --> 00:35:47,279 Speaker 11: takes away the fear that you'll be on a road 716 00:35:47,320 --> 00:35:50,680 Speaker 11: trip and you'll get stranded in GM and others are 717 00:35:50,680 --> 00:35:52,480 Speaker 11: coming out with cheap revis but it's going to be 718 00:35:52,520 --> 00:35:54,440 Speaker 11: a few years. So I think we're sort of like 719 00:35:55,440 --> 00:35:57,440 Speaker 11: technology always hits some of a geek out on you 720 00:35:57,600 --> 00:35:59,080 Speaker 11: an S curve. I think we're at the middle of 721 00:35:59,080 --> 00:36:02,600 Speaker 11: the We're the middle of that s where sales level 722 00:36:02,640 --> 00:36:06,560 Speaker 11: off until prices come down and everything becomes more accessible 723 00:36:06,560 --> 00:36:07,239 Speaker 11: for everybody. 724 00:36:07,480 --> 00:36:11,160 Speaker 4: Mark Royce also did shrug off concerns as far as 725 00:36:11,239 --> 00:36:14,200 Speaker 4: when it comes to why a copper shortage would threaten 726 00:36:14,360 --> 00:36:19,000 Speaker 4: evs as well as green transition. But innovation in vvs 727 00:36:19,120 --> 00:36:22,440 Speaker 4: has been seen as denting copper demand's growth potential. How 728 00:36:22,480 --> 00:36:24,759 Speaker 4: do you view this and how potentially big of an 729 00:36:24,760 --> 00:36:26,160 Speaker 4: issue when it comes to copper do you think this 730 00:36:26,200 --> 00:36:27,360 Speaker 4: could be for EV makers? 731 00:36:28,840 --> 00:36:32,480 Speaker 11: Yeah. One of the challenges for everybody going forth with 732 00:36:32,520 --> 00:36:35,400 Speaker 11: the evs is you're in the commodities market. You know 733 00:36:35,680 --> 00:36:37,520 Speaker 11: you're looking for with them, you're looking for cobal, you're 734 00:36:37,520 --> 00:36:40,279 Speaker 11: looking for copper, and you are subject to the price 735 00:36:40,320 --> 00:36:44,480 Speaker 11: fluctuations and everyone's going to be competing for availability. GM 736 00:36:44,640 --> 00:36:46,399 Speaker 11: is one of the companies that's done a pretty good 737 00:36:46,480 --> 00:36:50,759 Speaker 11: job of forming joint ventures, buying stakes in minds and 738 00:36:51,480 --> 00:36:56,319 Speaker 11: securing access to these minerals. That'll basically give them enough 739 00:36:56,680 --> 00:36:59,520 Speaker 11: materials to make the batteries to make the evs going 740 00:36:59,520 --> 00:37:02,280 Speaker 11: out I think twenty twenty six, and in some cases beyond. 741 00:37:02,800 --> 00:37:05,279 Speaker 11: Mark the answer is interesting. Anyone who thinks we're going 742 00:37:05,320 --> 00:37:07,560 Speaker 11: to be using the same technology in the same battery 743 00:37:07,600 --> 00:37:10,440 Speaker 11: chemistry in the next couple of years is looking at 744 00:37:10,440 --> 00:37:12,480 Speaker 11: this the wrong way. So I think there are a 745 00:37:12,480 --> 00:37:14,439 Speaker 11: couple of you know, GM and others. Ford has moved 746 00:37:14,440 --> 00:37:16,920 Speaker 11: to do this too, and certainly Tesla has. They've they've 747 00:37:16,960 --> 00:37:19,920 Speaker 11: got deals out there to secure production of some of 748 00:37:19,960 --> 00:37:22,239 Speaker 11: these key minerals. But I think they're also looking at 749 00:37:22,239 --> 00:37:25,560 Speaker 11: all kinds of chemistries where they can reduce the requirements 750 00:37:25,640 --> 00:37:30,279 Speaker 11: for either expensive or tough to get materials. And but 751 00:37:30,320 --> 00:37:33,560 Speaker 11: they're they're gonna be, you know, they're going to be 752 00:37:33,560 --> 00:37:36,000 Speaker 11: in this game of kind of racing through either innovation 753 00:37:36,160 --> 00:37:37,920 Speaker 11: or mining deals to make sure they're getting the right 754 00:37:37,920 --> 00:37:39,000 Speaker 11: stuff at a decent price. 755 00:37:39,960 --> 00:37:44,120 Speaker 1: So is there a sense within DC about how this 756 00:37:44,160 --> 00:37:47,920 Speaker 1: industry is gonna, you know, kind of evolve from internal 757 00:37:47,920 --> 00:37:52,319 Speaker 1: combustion to electric is it? Because Mark said also that hey, 758 00:37:52,320 --> 00:37:55,359 Speaker 1: we're going to continue to make internal combustion engines as 759 00:37:55,360 --> 00:37:57,800 Speaker 1: long as people want them as well. Is this something 760 00:37:57,800 --> 00:38:00,640 Speaker 1: that can coexist or is at a definite phase in 761 00:38:00,800 --> 00:38:02,040 Speaker 1: phase out process? 762 00:38:03,160 --> 00:38:05,120 Speaker 11: It is, and I think, look, they're going to be 763 00:38:05,960 --> 00:38:09,120 Speaker 11: people who just don't want to make the transition to 764 00:38:09,200 --> 00:38:12,400 Speaker 11: EVS in the next five years, you know what. I 765 00:38:12,880 --> 00:38:16,080 Speaker 11: think one of the challenges everyone talks about charging, Okay, there, 766 00:38:16,120 --> 00:38:17,799 Speaker 11: I don't have charges in the highway. Some people will 767 00:38:17,880 --> 00:38:20,759 Speaker 11: resist that. People talk about the price. People don't want 768 00:38:20,760 --> 00:38:23,360 Speaker 11: to pay that much. Totally true, and you have to 769 00:38:23,360 --> 00:38:26,920 Speaker 11: remember that, you know what, three quarters of the US 770 00:38:27,000 --> 00:38:29,839 Speaker 11: vehicle market is use vehicles. Those people absolutely don't have 771 00:38:30,200 --> 00:38:32,040 Speaker 11: the money to pay for a sixty or eight thousand 772 00:38:32,080 --> 00:38:34,200 Speaker 11: dollar refie, So prices have to come down. But there's 773 00:38:34,200 --> 00:38:36,399 Speaker 11: another thing here. People are kind of happy with their 774 00:38:36,680 --> 00:38:40,759 Speaker 11: gasoline burning vehicles, and you really have to find a 775 00:38:40,760 --> 00:38:43,720 Speaker 11: way to dislodge them from that, whether it's just getting 776 00:38:43,719 --> 00:38:45,840 Speaker 11: them to try and EV and I've driven some of 777 00:38:45,880 --> 00:38:47,880 Speaker 11: them on the market. It really is a better experience. 778 00:38:47,960 --> 00:38:52,359 Speaker 11: I love driving them. But you still have to pull 779 00:38:52,360 --> 00:38:54,600 Speaker 11: people out of something that right now they're pretty happy with. 780 00:38:54,760 --> 00:38:59,680 Speaker 11: And that's a marketing and market challenge, so you know, 781 00:39:00,800 --> 00:39:02,080 Speaker 11: and it's not going to be that easy for a 782 00:39:02,080 --> 00:39:04,960 Speaker 11: lot of these buyers, evs have captured the imagination and 783 00:39:04,960 --> 00:39:07,400 Speaker 11: a lot of people are shopping them, but you know, 784 00:39:07,560 --> 00:39:09,640 Speaker 11: getting the fifty percent of the market, which is what 785 00:39:10,480 --> 00:39:13,320 Speaker 11: some of the or more which is what some of 786 00:39:13,360 --> 00:39:17,120 Speaker 11: the requirements in Washington are calling for by twenty thirty two, 787 00:39:18,360 --> 00:39:20,080 Speaker 11: I think it's going to be tough given where the 788 00:39:20,120 --> 00:39:21,799 Speaker 11: consumer mindset is right now. 789 00:39:22,600 --> 00:39:25,160 Speaker 4: And to follow up on that, when Matt Miller asked 790 00:39:25,160 --> 00:39:28,520 Speaker 4: Mark Rory's about whether these vehicles would be profitable when 791 00:39:28,520 --> 00:39:30,400 Speaker 4: they start selling them, when they were talking about the 792 00:39:30,440 --> 00:39:34,240 Speaker 4: Cadillac Escalade IQ specifically, which does has the one hundred 793 00:39:34,239 --> 00:39:36,680 Speaker 4: and thirty thousand dollars price tag, not surprisingly he did 794 00:39:36,680 --> 00:39:39,359 Speaker 4: immediately say yes. And you were just talking about these 795 00:39:39,400 --> 00:39:42,799 Speaker 4: profitability challenges. What EV makers in this space do you 796 00:39:42,840 --> 00:39:45,160 Speaker 4: think are maybe better equipped when it comes to sort 797 00:39:45,160 --> 00:39:47,239 Speaker 4: of these marketing campaigns that you were just talking about 798 00:39:47,360 --> 00:39:49,920 Speaker 4: versus others that you think might struggle with this. 799 00:39:50,880 --> 00:39:53,640 Speaker 11: I TESTSA obviously, because they've already got a great brand 800 00:39:53,640 --> 00:39:56,759 Speaker 11: and they're already profitable here. They spend very little on 801 00:39:56,840 --> 00:40:00,400 Speaker 11: marketing because the brand is so great. I think all 802 00:40:00,400 --> 00:40:04,000 Speaker 11: the major car companies have just big marketing budgets and 803 00:40:04,000 --> 00:40:07,759 Speaker 11: they can really push this. You know, the question is 804 00:40:07,920 --> 00:40:10,959 Speaker 11: for them, can they make money on these vehicles? And 805 00:40:11,280 --> 00:40:13,879 Speaker 11: that was an interesting answer for Royce. I think part 806 00:40:13,920 --> 00:40:16,080 Speaker 11: of the reason he's seeing the Escalator to be profitable 807 00:40:16,080 --> 00:40:18,120 Speaker 11: out of the gate is it starts at one hundred 808 00:40:18,120 --> 00:40:19,279 Speaker 11: and thirty thousand and it will probably go up to 809 00:40:19,280 --> 00:40:21,800 Speaker 11: one hundred and fifty thousand per vehicle. You can hide 810 00:40:21,840 --> 00:40:24,879 Speaker 11: a lot of battery cost in a sticker price that big. 811 00:40:25,960 --> 00:40:28,680 Speaker 11: But look, one thing GM has and the reason that 812 00:40:29,360 --> 00:40:31,919 Speaker 11: they aren't selling as many of their newest dvs as 813 00:40:32,000 --> 00:40:36,759 Speaker 11: Ford is Ford basically took platforms of an F one 814 00:40:36,840 --> 00:40:41,560 Speaker 11: fifty pickup and their mid size you know, crossover suv segment, 815 00:40:41,600 --> 00:40:44,920 Speaker 11: and they converted them, heavily modified them to make the 816 00:40:44,960 --> 00:40:48,680 Speaker 11: Machi and the F one fifty Lightning. GM took a 817 00:40:48,680 --> 00:40:50,319 Speaker 11: step back. They said, look, we don't need to be 818 00:40:50,360 --> 00:40:52,560 Speaker 11: here now because EV volume is not that big, and 819 00:40:52,600 --> 00:40:55,920 Speaker 11: they made a dedicated TV platform and the whole idea 820 00:40:55,960 --> 00:40:59,560 Speaker 11: there was you're basically using the same battery, same platform 821 00:40:59,719 --> 00:41:03,200 Speaker 11: for the future Chevy Bolt small vehicle on up to 822 00:41:03,239 --> 00:41:06,640 Speaker 11: the giant Escala, giant hummer, and they get economies that 823 00:41:06,719 --> 00:41:08,959 Speaker 11: scale that way. So it's taking them longer to get there. 824 00:41:09,120 --> 00:41:12,480 Speaker 11: But the plan is that you do get to scale 825 00:41:12,920 --> 00:41:15,839 Speaker 11: the volume of all your evs over seven, eight, ten, 826 00:41:15,960 --> 00:41:18,560 Speaker 11: twelve name plates over the next couple of years, and 827 00:41:18,600 --> 00:41:21,200 Speaker 11: they're saying that they will be profitable by twenty twenty five. 828 00:41:21,280 --> 00:41:23,520 Speaker 11: Now the catch there is again, they can build a 829 00:41:23,560 --> 00:41:25,560 Speaker 11: million vehicles. If they sell them all, they probably will 830 00:41:25,560 --> 00:41:27,879 Speaker 11: be profitable. What I'd like to know is how many 831 00:41:27,880 --> 00:41:30,319 Speaker 11: of that one million worth of production capacity they need 832 00:41:30,360 --> 00:41:33,440 Speaker 11: to sell to be a break even. One forecaster told 833 00:41:33,440 --> 00:41:36,080 Speaker 11: where they see GMS selling about three hundred fifty twenty 834 00:41:36,080 --> 00:41:38,440 Speaker 11: twenty five. Would they be profitable there? I don't know. 835 00:41:38,520 --> 00:41:40,160 Speaker 11: I think it's tough at that point if you're tilling 836 00:41:40,200 --> 00:41:42,200 Speaker 11: up for a million vehicles and you sell a third 837 00:41:42,239 --> 00:41:45,440 Speaker 11: of that. But that forecaster could be wrong, you know. 838 00:41:45,600 --> 00:41:48,440 Speaker 11: So sales volume matters, and whether or not they can 839 00:41:48,440 --> 00:41:51,319 Speaker 11: get consumers to bite on all of this volume, that's 840 00:41:51,320 --> 00:41:54,719 Speaker 11: what's going to determine their profitability on the programs all right. 841 00:41:54,719 --> 00:41:57,399 Speaker 1: Well, in the meantime, Matt Miller can go test drive 842 00:41:57,440 --> 00:42:01,080 Speaker 1: a whole new series of Elections vehicles in addition to 843 00:42:01,080 --> 00:42:03,480 Speaker 1: the internal combustion, So who'll be happy and I'm sure 844 00:42:03,560 --> 00:42:05,560 Speaker 1: David you did get your fair share of test drives 845 00:42:05,560 --> 00:42:08,840 Speaker 1: as well, So good luck with that. David Welch, Detroit 846 00:42:08,880 --> 00:42:13,560 Speaker 1: bureau chief for Bloomberg News. And before that, just commenting 847 00:42:13,560 --> 00:42:16,080 Speaker 1: on the you know, the car business. And again before that, 848 00:42:16,160 --> 00:42:20,160 Speaker 1: General Owners President Mark Royce with Matt Miller and like 849 00:42:20,239 --> 00:42:23,960 Speaker 1: all the other most of the other major automakers around 850 00:42:24,000 --> 00:42:27,319 Speaker 1: the world all in on electric vehicles. I guess, I 851 00:42:27,360 --> 00:42:28,120 Speaker 1: guess you have to be. 852 00:42:28,239 --> 00:42:29,120 Speaker 4: You almost have to be. 853 00:42:29,080 --> 00:42:31,880 Speaker 6: In you're listening to the tape. Cans are live program 854 00:42:31,920 --> 00:42:35,880 Speaker 6: Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, 855 00:42:36,040 --> 00:42:38,759 Speaker 6: the tune in app, Bloomberg dot Com, and the Bloomberg 856 00:42:38,800 --> 00:42:41,880 Speaker 6: Business app. You can also listen live on Amazon Alexa 857 00:42:41,960 --> 00:42:45,239 Speaker 6: from our flagship New York station. Just say Alexa, play 858 00:42:45,360 --> 00:42:47,360 Speaker 6: Bloomberg eleven thirty. 859 00:42:48,800 --> 00:42:51,720 Speaker 1: So get a little bit better understanding of the gaming business. 860 00:42:51,760 --> 00:42:54,440 Speaker 1: We turn a hand. She's the CEO and chairwoman of 861 00:42:54,560 --> 00:42:59,040 Speaker 1: Super League Gaming is a Nasdaq listed stock. Sl GG 862 00:42:59,800 --> 00:43:03,160 Speaker 1: is the ticker hey, And again, one of the big 863 00:43:03,200 --> 00:43:06,120 Speaker 1: news items on the tape today is the roadblocks earnings. 864 00:43:06,360 --> 00:43:07,879 Speaker 1: I'm sure you've had a chance to take a look. 865 00:43:08,080 --> 00:43:10,360 Speaker 1: What did you take away from that and are you 866 00:43:10,400 --> 00:43:12,400 Speaker 1: seeing any of those issues at your company? 867 00:43:14,280 --> 00:43:16,879 Speaker 12: Actually, it's really the inverse, and I think a lot 868 00:43:16,920 --> 00:43:20,040 Speaker 12: of this is just because investors this is. 869 00:43:20,040 --> 00:43:22,480 Speaker 13: A new category for them to really understand. 870 00:43:22,680 --> 00:43:25,360 Speaker 12: You guys, I heard your intro and you're talking about 871 00:43:25,360 --> 00:43:28,600 Speaker 12: the fact that about gaming and it being hits driven. 872 00:43:30,239 --> 00:43:34,359 Speaker 12: You know, game platforms like Roadblocks are very different than 873 00:43:34,400 --> 00:43:36,839 Speaker 12: the traditional video games we know and love. So, first 874 00:43:36,880 --> 00:43:39,719 Speaker 12: of all, you guys nailed it. Gaming is at the 875 00:43:39,960 --> 00:43:43,000 Speaker 12: center of entertainment. It was bigger than the film, box 876 00:43:43,040 --> 00:43:46,160 Speaker 12: office and TV even prior to COVID. But what makes 877 00:43:46,440 --> 00:43:49,960 Speaker 12: platforms like Roadblocks different is you don't play Roadblocks. You 878 00:43:50,080 --> 00:43:53,799 Speaker 12: play thousands of games inside of Roadblocks. And what they've 879 00:43:53,840 --> 00:43:56,680 Speaker 12: done effectively is they've put the tools in the hands 880 00:43:57,000 --> 00:44:00,960 Speaker 12: to everyday gamers to make develop their own own game worlds. 881 00:44:01,000 --> 00:44:04,120 Speaker 12: And so what's powerful about that is is that now 882 00:44:04,160 --> 00:44:07,800 Speaker 12: you've been listed, you've democratized and enlisted you know, millions 883 00:44:07,800 --> 00:44:10,040 Speaker 12: of people around the world to make those hits for 884 00:44:10,080 --> 00:44:12,880 Speaker 12: you and for each other and to enjoy gameplay. 885 00:44:13,000 --> 00:44:15,200 Speaker 13: And so when I look at you know the. 886 00:44:15,200 --> 00:44:19,120 Speaker 12: Fact that Roadblocks is reaching over sixty five million daily 887 00:44:19,160 --> 00:44:23,040 Speaker 12: active users you know, generating you know, billions and billions 888 00:44:23,040 --> 00:44:28,279 Speaker 12: of hours of gameplay each quarter. It's really significant, the 889 00:44:28,320 --> 00:44:31,000 Speaker 12: amount of engagement. I often say to investors, don't even 890 00:44:31,000 --> 00:44:32,040 Speaker 12: think of it as gaming. 891 00:44:32,520 --> 00:44:34,360 Speaker 13: What's so powerful about roadbloxes. 892 00:44:34,440 --> 00:44:36,759 Speaker 12: Most of the people are there to either create or 893 00:44:36,880 --> 00:44:40,000 Speaker 12: just to socialize, like a digital cul de sac. So 894 00:44:40,120 --> 00:44:43,280 Speaker 12: think of it as more the next generation of social media. 895 00:44:43,760 --> 00:44:45,640 Speaker 13: This is much more. 896 00:44:45,520 --> 00:44:51,600 Speaker 12: Highly customizable, personalized, social interactive. And why that's powerful is 897 00:44:51,640 --> 00:44:54,399 Speaker 12: it changes the landscape of how you can bring advertisers 898 00:44:54,400 --> 00:44:58,000 Speaker 12: and brands into the game. So I think that for Roadblocks, 899 00:44:58,000 --> 00:45:00,360 Speaker 12: investors should hang in there because what the going to 900 00:45:00,400 --> 00:45:03,360 Speaker 12: see is is that the potential for the advertising model 901 00:45:03,360 --> 00:45:05,520 Speaker 12: to really take off, it's in its nascent days. 902 00:45:06,120 --> 00:45:07,120 Speaker 13: The best is jet to come. 903 00:45:08,000 --> 00:45:10,680 Speaker 4: You did bring up daily active users, so that did 904 00:45:10,680 --> 00:45:14,240 Speaker 4: fall about one percent last quarter to around sixty five million, 905 00:45:14,400 --> 00:45:17,319 Speaker 4: up though twenty five percent from a year earlier. So 906 00:45:17,520 --> 00:45:19,640 Speaker 4: still when you're looking at daily active user count and 907 00:45:19,760 --> 00:45:22,680 Speaker 4: hours play, that did fall short of Wall Street analyst expectations. 908 00:45:22,680 --> 00:45:24,799 Speaker 4: But I wanted to gauge your thoughts on this because 909 00:45:24,880 --> 00:45:28,799 Speaker 4: Roadblocks typically doesn't provide financial projections how much of that 910 00:45:29,080 --> 00:45:30,880 Speaker 4: goes into the sell off that we're seeing in the 911 00:45:30,880 --> 00:45:33,120 Speaker 4: stock today when investors have a hard time kind of 912 00:45:33,160 --> 00:45:36,520 Speaker 4: gauging potentially where the company sees things headed. 913 00:45:37,680 --> 00:45:39,920 Speaker 12: Yeah, I mean, I do think there's an opportunity for 914 00:45:40,000 --> 00:45:42,920 Speaker 12: them to paint maybe a more specific narrative around the 915 00:45:42,960 --> 00:45:47,000 Speaker 12: ad model, because it's significant when you're reaching that type 916 00:45:47,040 --> 00:45:50,600 Speaker 12: of scale. The other important thing to note about Roadblocks 917 00:45:50,680 --> 00:45:53,200 Speaker 12: is their audience is aging up in a good way 918 00:45:54,160 --> 00:45:57,040 Speaker 12: because a lot of those under thirteen players have now 919 00:45:57,080 --> 00:46:01,200 Speaker 12: grown into sixteen, seventeen, over eighteen year olds, and that 920 00:46:01,800 --> 00:46:05,279 Speaker 12: really opens up the nut even wider for the advertising opportunity. 921 00:46:05,360 --> 00:46:08,040 Speaker 12: Keep in mind, the primary modeization model has always for 922 00:46:08,080 --> 00:46:11,839 Speaker 12: them been consumer modelization, and so for them to now 923 00:46:11,880 --> 00:46:14,560 Speaker 12: add this additional revenue stream for which Super League is 924 00:46:14,600 --> 00:46:18,399 Speaker 12: one of their strategic partners in selling off, think about 925 00:46:18,400 --> 00:46:21,600 Speaker 12: all those eyeballs are reaching and all the opportunity. I mean, 926 00:46:21,640 --> 00:46:26,560 Speaker 12: this is like rocket fuel for Roadblocks and enlisting a 927 00:46:26,600 --> 00:46:29,640 Speaker 12: partner like us to do that selling and that modization 928 00:46:29,760 --> 00:46:32,880 Speaker 12: for them. But imagine what it does for a small 929 00:46:32,920 --> 00:46:36,000 Speaker 12: cap company like super League to have Roadblocks and that 930 00:46:36,160 --> 00:46:39,000 Speaker 12: engine and power and reach behind it to kind of 931 00:46:39,040 --> 00:46:42,440 Speaker 12: help us really accelerate our revenue growth too. So I 932 00:46:42,520 --> 00:46:46,319 Speaker 12: again do believe that while the daily active users felt 933 00:46:46,360 --> 00:46:50,160 Speaker 12: a little bit flat, the mix is powerful, the portfolio is. 934 00:46:50,120 --> 00:46:53,120 Speaker 13: Powerful, and it's still a crazy amount of reach. 935 00:46:54,040 --> 00:46:58,719 Speaker 1: And can you define for us what metaverse gaming is 936 00:46:59,760 --> 00:47:02,240 Speaker 1: an how big is it and howf az is it growing? 937 00:47:03,200 --> 00:47:07,160 Speaker 12: Yeah, it's such an important point because again, it's so 938 00:47:07,280 --> 00:47:09,839 Speaker 12: different than the games that I played growing up. I mean, 939 00:47:09,880 --> 00:47:12,719 Speaker 12: first of all, we've already seen it that gaming isn't 940 00:47:12,719 --> 00:47:14,279 Speaker 12: something anymore you grow out of. 941 00:47:14,960 --> 00:47:16,000 Speaker 13: It's more of a lifestyle. 942 00:47:16,120 --> 00:47:19,520 Speaker 12: And that's again because these game platforms have changed things. 943 00:47:20,040 --> 00:47:24,080 Speaker 12: You know, traditional games that people like Activision and Take 944 00:47:24,160 --> 00:47:27,640 Speaker 12: two make, those are games where they serve a map 945 00:47:27,760 --> 00:47:29,920 Speaker 12: or a game up to you and you just play 946 00:47:29,960 --> 00:47:32,799 Speaker 12: the game, and you know there's different strategies, but it's 947 00:47:32,880 --> 00:47:35,000 Speaker 12: not something that you can modify and adapt. 948 00:47:35,080 --> 00:47:39,200 Speaker 13: What's so different about Minecraft, Roadblocks and now Fortnite made 949 00:47:39,200 --> 00:47:42,160 Speaker 13: by Epic Games is that what they're really doing is 950 00:47:42,200 --> 00:47:45,720 Speaker 13: handing out the tools to empower other people to make experiences. 951 00:47:45,960 --> 00:47:50,080 Speaker 13: And when I say experiences, it's not most of the times, 952 00:47:50,120 --> 00:47:54,040 Speaker 13: it's not about points and winners and losers. It's experiences 953 00:47:54,080 --> 00:47:57,200 Speaker 13: like a pop up concert or maybe you can tour 954 00:47:57,320 --> 00:48:01,440 Speaker 13: through a museum. Today, the AP just put out a 955 00:48:01,520 --> 00:48:05,560 Speaker 13: story about how Super League Is has been enlisted to 956 00:48:05,680 --> 00:48:10,319 Speaker 13: recreate Hamilton inside of roadblocks, so you can now go, 957 00:48:10,520 --> 00:48:14,440 Speaker 13: you can experience Hamilton and you can learn about American 958 00:48:14,560 --> 00:48:17,919 Speaker 13: history in a very gamified way. And so the important thing, 959 00:48:18,080 --> 00:48:20,919 Speaker 13: again just to denoteice, is that two D. 960 00:48:20,960 --> 00:48:26,080 Speaker 12: And three D metaverse worlds or these game platforms are 961 00:48:26,160 --> 00:48:29,080 Speaker 12: much more, as I said earlier, like an extension of 962 00:48:29,120 --> 00:48:32,920 Speaker 12: someone's physical social life and everything that you can do 963 00:48:33,000 --> 00:48:35,759 Speaker 12: in the real world you can have a digital twin of. 964 00:48:35,920 --> 00:48:39,680 Speaker 12: And so I really think metaverse games people need to 965 00:48:39,719 --> 00:48:43,560 Speaker 12: think super broadly because again it's not just about competition 966 00:48:44,080 --> 00:48:47,040 Speaker 12: and winning and losing. It's much more about taking your 967 00:48:47,040 --> 00:48:50,440 Speaker 12: physical life and having an expression of itself digitally. 968 00:48:50,640 --> 00:48:54,160 Speaker 4: Really about we really have about forty seconds left, But 969 00:48:54,200 --> 00:48:57,840 Speaker 4: how can advertisers use the metaverse as an additional marketing 970 00:48:57,920 --> 00:49:00,000 Speaker 4: channel to make money? 971 00:49:00,120 --> 00:49:01,600 Speaker 13: Yeah, so that's what's so important. 972 00:49:01,600 --> 00:49:03,600 Speaker 12: When you look at what we did when we recreated 973 00:49:03,640 --> 00:49:07,440 Speaker 12: Barbie's dream House in October last year, we drove sixty 974 00:49:07,520 --> 00:49:12,000 Speaker 12: million visits to barbie Streamhouse. That's powerful engagement and the 975 00:49:12,040 --> 00:49:14,839 Speaker 12: average to all time was about seven to eight minutes. Similarly, 976 00:49:14,880 --> 00:49:18,120 Speaker 12: with Chipotle, we drove one of their highest digital food 977 00:49:18,160 --> 00:49:21,120 Speaker 12: sales days and their highest digital app sale day by 978 00:49:21,200 --> 00:49:25,319 Speaker 12: allowing first people to experience a pop up Chipottle in 979 00:49:25,360 --> 00:49:28,760 Speaker 12: an immersive world and then that converted them into digital 980 00:49:28,760 --> 00:49:31,000 Speaker 12: app downloads and food sales. We gave out one hundred 981 00:49:31,040 --> 00:49:34,200 Speaker 12: and thirty thousand free burritos in real life in thirty minutes. 982 00:49:34,239 --> 00:49:37,120 Speaker 12: So this is the new way for brands to find 983 00:49:37,120 --> 00:49:40,239 Speaker 12: this next generation. They meet brands for the first time, 984 00:49:40,680 --> 00:49:43,760 Speaker 12: forty seven percent through digital screens. 985 00:49:44,040 --> 00:49:44,840 Speaker 13: That's where they need to. 986 00:49:44,840 --> 00:49:47,680 Speaker 1: Be powerful stuff. I really appreciate getting some of your time, 987 00:49:47,800 --> 00:49:51,920 Speaker 1: and it's an hand CEO and chairwoman of Super League 988 00:49:52,040 --> 00:49:55,120 Speaker 1: Gaming talking about meta version gaming. I mean it's getting 989 00:49:55,120 --> 00:49:57,120 Speaker 1: more immersive, interesting stuff. 990 00:50:00,320 --> 00:50:03,440 Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can 991 00:50:03,440 --> 00:50:07,240 Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever 992 00:50:07,320 --> 00:50:11,040 Speaker 2: podcast platform you prefer. I'm Matt Miller, I'm on Twitter 993 00:50:11,239 --> 00:50:14,280 Speaker 2: at Matt Miller nineteen seventy three, and I'm fall. 994 00:50:14,200 --> 00:50:17,040 Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast, 995 00:50:17,080 --> 00:50:20,560 Speaker 1: you can always catch us worldwide at Bloomberg Radio