Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. All right, we're gonna round
Speaker 1: out this show this week by Taco Little Sports, so
Speaker 1: private jets. It's certainly it's like Balder's here on Bloomberg
Speaker 1: Business Week. Carol Masser, watch that showers. No, I know
Speaker 1: about it. We've talked about it. Let's get to it.
Speaker 1: Let's get do it. Let's get to it. Let's get
Speaker 1: to it. Joe McClean is here with this managing partner
Speaker 1: for Intersect Capital Joinius on the phone from San Ramon, California.
Speaker 1: I'm sure he he uh, he really likes my bather's reference.
Speaker 1: I'm guessing Joe. Really nice to have you with us. Uh, Sports,
Speaker 1: we're missing it. Are we going to get some sports back? Soon?
Speaker 1: Please tell me? Use? Well, can I just tell you
Speaker 1: that I certainly want to back more than you I have.
Speaker 1: I have never never in my career had every single
Speaker 1: client that we worked with sitting at home. Yeah uh
Speaker 1: with and they've all been good savers. You know that
Speaker 1: our role of thumb is minimum six out of all
Speaker 1: net dollars that come in, they must put away for retirement.
Speaker 1: So they're flushed with cash, with a bunch of time
Speaker 1: on their hands, and really bored and ready to spend money.
Speaker 1: So I see that you're gonna be talking about private
Speaker 1: jet afterwards that they're not always my best friends want
Speaker 1: to get back to work. Are you telling your clients like, no,
Speaker 1: you don't need the private jet? Well, they're they're they're
Speaker 1: pushing really hard because they say, actually, it is the
Speaker 1: need right now because I don't want to be out
Speaker 1: in the in the public. And you know, the NBA,
Speaker 1: they're trying to finish the season. Baseball is trying to
Speaker 1: start the season. Um, you know the NFL players they
Speaker 1: haven't even had a chance to take their physicals. So
Speaker 1: you have the NFL Draft, you have the free agents
Speaker 1: all trying to move around, and until they take their physicals,
Speaker 1: those contracts aren't valid. And so there's a lot of
Speaker 1: uncertainty up in the air right now. And so as
Speaker 1: you look across especially the pro sports. Just sticking with
Speaker 1: that for a second, and Joe, what are you the
Speaker 1: most optimistic about, you know, talking to your contacts and league,
Speaker 1: talking to your clients, just talking to the folks that
Speaker 1: that you talked to. What's a likely scenario for pro sports.
Speaker 1: In your estimation, I think you're going to see golf first. Um.
Speaker 1: You already saw it last weekend with the four the
Speaker 1: players playing with with no fans and no caddies. I
Speaker 1: thought that was hilarious, with Dustin Johnson hitting a shot
Speaker 1: and just walking away and forgetting that he actually has
Speaker 1: to carry a bag. You'll see that in June at
Speaker 1: some point. Um, basketball is I'm not as optimistic, although
Speaker 1: if you talk to the players that they're very optimistic.
Speaker 1: They have the best relationship with their commissioner, Frankly UM
Speaker 1: and the and the commissioner has been very candid, UM,
Speaker 1: but I know he's also been very cautious. You know,
Speaker 1: we have some players that are still sitting Americans that
Speaker 1: are sitting in China waiting for that league to start.
Speaker 1: And they've been there now for months. They've quarantined for
Speaker 1: two weeks, They've now been there for over two months,
Speaker 1: every players in one city, and they're still not ready
Speaker 1: to go. So I'm not saying China is a leading
Speaker 1: indicator of what the NBA can do in the States,
Speaker 1: but there's still no movement there and it's tough to
Speaker 1: say that they'll be moving in the States until I
Speaker 1: see some positive momentum there. What about other sports? All right,
Speaker 1: so we talked about golf, you think first you're not
Speaker 1: as optimistic about basketball. What else? So baseball, you know,
Speaker 1: they're they're installed with with the conversations they're trying to have,
Speaker 1: you know, it's they've already come out obviously there's going
Speaker 1: to be a reduced schedule, UM, which means reduced salaries. UM.
Speaker 1: There's still also fighting for some of the details like, um,
Speaker 1: you know, in baseball, you really want to get your
Speaker 1: service time under your belt each year, and if they
Speaker 1: don't play a certain amount of games, they may not
Speaker 1: qualified for that. So the players want to make sure
Speaker 1: that all their rights are protected. Um. Not just not
Speaker 1: just that it's safe to play, but that's also they're
Speaker 1: not giving in on anything they wouldn't give in a
Speaker 1: regular season. So I think baseball has has a good
Speaker 1: opportunity to come back, but it's not surely nothing in
Speaker 1: the summer, and football, I think it's the same. You know,
Speaker 1: they until each state starts opening up and giving um,
Speaker 1: you know, the players the opportunity to even train, let
Speaker 1: alone play. UM, I still don't see any in the
Speaker 1: summer there they they're they've already been told they can't
Speaker 1: take physicals until mid mid June, late June. So, um,
Speaker 1: it's gonna be a long way, a long long way
Speaker 1: for all of us. Well, Joe, let's talk about baseball
Speaker 1: if we can for a second, because the economics there,
Speaker 1: I think are really interesting and this really plays, I
Speaker 1: think into a lot of what you talk about with
Speaker 1: with your clients. Um. And you know, I had a
Speaker 1: chance to catch up earlier in the week with Rachel Luba,
Speaker 1: who is the agent to Trevor Bauer, as you know,
Speaker 1: and you know, one of the things she said was
Speaker 1: that they are so far apart in in part because
Speaker 1: there's it feels like a fundamental disagreement on the economics
Speaker 1: and sort of who should kind of bear the burden
Speaker 1: of this. And I do wonder for someone who is
Speaker 1: advising baseball players and others about their their wealth, what
Speaker 1: you make of this argument between the owners and the players. Well,
Speaker 1: in my estimation, baseball has their players Association has always
Speaker 1: had one of the strongest, strongest teams in place for
Speaker 1: the players, um, and and that has led to some
Speaker 1: incredible economics on behalf of the players. However, you know,
Speaker 1: the problem now is there's some some athletes making million
Speaker 1: dollars a year and they're already seeing a ten million
Speaker 1: dollar pay cut. Nobody's feeling sorry for them. But um,
Speaker 1: there's gonna be a point where they've got to make
Speaker 1: some compromises where in the past they haven't. Um. And
Speaker 1: then every once in a while the owners want to
Speaker 1: take out, you know, for a spin, the whole idea
Speaker 1: of of salary caps um, which obviously in baseball don't exist,
Speaker 1: they do exist in and other sports. Um, that the
Speaker 1: players have always fought against. So there's going to be
Speaker 1: a compromise, I think because they know how important it
Speaker 1: is to get the game out because in fairness, the
Speaker 1: television has been strong. Yeah, but but the popularity hasn't
Speaker 1: been there. So you don't want to go away for
Speaker 1: entire season, um, I don't think, because you'll lose a
Speaker 1: lot of momentum. Yeah. Now, I think that's exactly right.
Speaker 1: And I think it's also you know, worth remembering. Uh,
Speaker 1: And you pointed to this with the economics that you know,
Speaker 1: the baseball or baseball and Major League Baseball and the
Speaker 1: owners and the players, and certainly the owners rely a
Speaker 1: lot on the gate. Uh, you know, for a big
Speaker 1: chunk of that revenue, and so they are going to uh,
Speaker 1: they're certainly at a at a moment the owners are
Speaker 1: where they could lose a lot of money if there
Speaker 1: aren't fans in those stands. Joe McClean, stick with us.
Speaker 1: We're going to continue this conversation. As you can tell,
Speaker 1: we're pretty into it. Um. We want to talk with
Speaker 1: you about some of the advice you're giving these guys
Speaker 1: as they're probably bugging the heck out of you, or
Speaker 1: you're trying to keep them in line, as you say,
Speaker 1: during this time where they're getting a little bit restless.
Speaker 1: We're talking with Joe mclin he is managing partner Interset
Speaker 1: Capital join us on the phone from California. It's got
Speaker 1: to be like making sure they don't get into trouble, right, Seriously,
Speaker 1: a lot of downtime at this point. Our guest at
Speaker 1: this hour, Joe McClain, he's mamagining partnered Intersect Capital Capital. Uh,
Speaker 1: and he joins us on the phone from California. So
Speaker 1: I am curious, what are the conversations you're having, Joe,
Speaker 1: with some of your athletes who probably have a lot
Speaker 1: of extra time on their hands right now, so it's
Speaker 1: we've taken advantage of it. It's been the first couple
Speaker 1: of I would say January February. We've created these finance
Speaker 1: one on one teams because I've got to keep their
Speaker 1: mind active because as I mentioned, they've got a bunch
Speaker 1: of cash and they want to be purchasers of consumers.
Speaker 1: And so we've been having conversations around both being a
Speaker 1: consumer and an investor um. And so you know, as
Speaker 1: an example, we we we had dialogue a couple of
Speaker 1: years ago with would you rather buy Nike for ninety
Speaker 1: four dollars? What would you go rather go buy a
Speaker 1: pair of Jordan's for two dollars? Uh? And so don't
Speaker 1: just be a consumer, will being an investor? And so
Speaker 1: we're going through a lot of those exercises. Um. They
Speaker 1: all now know what it costs to be them, because
Speaker 1: that was a big question, you know, do you do
Speaker 1: you know what it cost to be you? Uh? And
Speaker 1: then the second question was how do we make it
Speaker 1: cost less to be you? And so if I can
Speaker 1: keep keep going with a lot of dialogue and education,
Speaker 1: that keeps them active because time and money are are
Speaker 1: not always in your favor. Especially at moments where you
Speaker 1: have nowhere else to go. Yeah, for sure. I mean
Speaker 1: and and do you sense a I mean this gets
Speaker 1: back to a little bit of what we were talking
Speaker 1: about with with baseball, in part because one of the
Speaker 1: arguments that you know, you're hearing sort of in the
Speaker 1: twitter twitter sphere and the talk radio sphere is like
Speaker 1: they need to understand that this is good for America.
Speaker 1: And I'm not saying I am saying that. I'm just
Speaker 1: saying that, you know, that's one of the arguments here.
Speaker 1: And I do wonder, you know, as we think about
Speaker 1: sports in culture and athletes in culture, how much you
Speaker 1: are talking with them about And I know you were
Speaker 1: primarily talking about their finances and their their financial health,
Speaker 1: but but I do wonder, since I know you think
Speaker 1: about sort of the whole person, what those conversations are
Speaker 1: like right now, because we're all being a little bit
Speaker 1: more self reflective, or I think trying to be at least. Yeah,
Speaker 1: I think we're all getting wakeup calls in some form
Speaker 1: um and and the big big buzzword has been you know,
Speaker 1: are you gonna pivot or reset into a positive direction?
Speaker 1: But you know what, I think it's it's been fascinating
Speaker 1: with the players is one of the first things that
Speaker 1: they noticed was the cause and effect that they have
Speaker 1: on everything else around them. As an example, you know,
Speaker 1: when they run into a play in a game, they
Speaker 1: see all the vendors, all the people that are in
Speaker 1: the arena. Typically you're so wired into play you don't
Speaker 1: see anything else around you. Well, now a lot of
Speaker 1: them are understanding that there these people's paychecks were tied
Speaker 1: to them playing, and the last couple of months, the
Speaker 1: majority of them are all helping to reports, literally making
Speaker 1: sure they have food, making sure they have income, taking
Speaker 1: a portion of their income and giving it to them.
Speaker 1: I think that this has been the it's hard to
Speaker 1: say it's been the coolest part, but it's been really
Speaker 1: interesting because now everyone understands how important each other are
Speaker 1: around them, and and so they do want to get
Speaker 1: back because they also realize, yes, it's great to watch
Speaker 1: the game and give somebody, you know, as everyone was
Speaker 1: watching the last dance, but it also gives people jobs,
Speaker 1: um and and optimism to get back out there, and
Speaker 1: so they want to play, but they also want to
Speaker 1: play so that other people that they support UM can
Speaker 1: get back out there. It's been cool. I think it's
Speaker 1: gonna be a big celebration when they get back. Yeah. Now,
Speaker 1: it's a really interesting and important point, I think, and
Speaker 1: I think we've all thought about that in a number
Speaker 1: of industries and sports is it is a phenomenal example
Speaker 1: of that. You know, these ecosystems that build up you know,
Speaker 1: down to that the not down to but including you know,
Speaker 1: the parking attendants and you know the folks who who
Speaker 1: owned the restaurants, you know, right there by Yankee Stadium
Speaker 1: and every other stadium and arena around the world. It's
Speaker 1: a really important point, and I think you're right. It
Speaker 1: takes something like this um for us to to really
Speaker 1: realize that. Yeah, and I hope we don't forget it.
Speaker 1: And even me personally, I through my small town and
Speaker 1: I don't always understand how that how important that we
Speaker 1: are supporting them. So I'm going to definitely support the
Speaker 1: local business owners more more so, and I think the
Speaker 1: athletes would think it the same. You know, we have
Speaker 1: a question that we have been asking you know, leaders
Speaker 1: like yourself, and that is, you know, how you think
Speaker 1: the coronavirus pandemic is going to change the world. You know,
Speaker 1: when we get out of this crisis. What's the most
Speaker 1: important and in your view, underappreciated way that the world
Speaker 1: in the world that you know will be, you know,
Speaker 1: radically different, And what do you think it will be too? Well,
Speaker 1: it's it's a it's a tough question to answer, but
Speaker 1: I think just for being understanding and essentially in our
Speaker 1: space where we work with people that are that youth
Speaker 1: and almost have to believe that they're invincible, that nobody is.
Speaker 1: And and as much as you can plan for uncertainty, um.
Speaker 1: Now you value the importance of doing planning for the unexpected. UM.
Speaker 1: But I think we will learn over time that there
Speaker 1: are some things that we can control, um, that we
Speaker 1: and there's things that we can't, but we need to
Speaker 1: do about our job at the things that we can control. Right,
Speaker 1: That's what a lot of the wake up calls we're
Speaker 1: all getting has been, you know, whether it's our family,
Speaker 1: whether it's our finances. Just having a true plan in
Speaker 1: place and make it intentional, um, And I think we'll
Speaker 1: be prepared for for anything going forward. And know that
Speaker 1: you know, no one person could do it on their own.
Speaker 1: It it does take you know, a team of people, UM.
Speaker 1: And I think it's important to keep supporting those people. So, um,
Speaker 1: it's fascinating. But I think this is gonna be a great,
Speaker 1: great opportunity coming out of this because we're all going
Speaker 1: to learn from it and we're going to teach the
Speaker 1: next generation how to overcome it. And I think that's awesome. Yeah, No,
Speaker 1: I think that's right. And it's a really nice optimistic
Speaker 1: note to end on Joe McClain, managing partner for Intersech Capital,
Speaker 1: joining us on the phone, and you know, just to
Speaker 1: give him some credit. I mean, he's got more than
Speaker 1: a billion and a half dollars in future contract money
Speaker 1: coming in for clients, and that includes one of the
Speaker 1: Splash Brothers, Clay Thompson, Dexter Feller in the Major League Baseball,
Speaker 1: in the Major League Baseball, in Major League Baseball, Sergio Garcia,
Speaker 1: a lot of folks you've heard of he's working with.
Speaker 1: Really nice conversation. I love what he said about the
Speaker 1: conversations that he's having with you know, his clients about
Speaker 1: you know, what it costs to be them right and
Speaker 1: how you can impact that. I think that kind of
Speaker 1: applies to the world. Like you think about that. You know,
Speaker 1: we've done that certainly in our house. It's like, Okay,
Speaker 1: what does it cost to be our family? And and
Speaker 1: what can you change to maybe be better? And where
Speaker 1: were you spending money that you're not spending money before.
Speaker 1: You know, when you think about your commute, when you
Speaker 1: think about all these different things, you know, it's a
Speaker 1: it's a radically different world in the short term, and
Speaker 1: the question is how different is gonna be on the
Speaker 1: other side. I really like Joe's answer to that question.
Speaker 1: That was a good one. That's fun of the invincibility.
Speaker 1: We take it for granted,