1 00:00:02,160 --> 00:00:04,560 Speaker 1: Thank you so much for joining us for this special 2 00:00:04,720 --> 00:00:08,119 Speaker 1: edition of Bloomberg Daybreak. US markets are close for the 3 00:00:08,200 --> 00:00:11,680 Speaker 1: Juneteenth holiday. I'm Nathan Hager, and coming up this hour, 4 00:00:11,760 --> 00:00:14,600 Speaker 1: we will focus on retail, a close look at the 5 00:00:14,600 --> 00:00:18,439 Speaker 1: health of the country's biggest companies. Bert Flickinger, Managing director 6 00:00:18,440 --> 00:00:21,560 Speaker 1: at Strategic Resource Group, will join us along with Bloomberg 7 00:00:21,560 --> 00:00:25,400 Speaker 1: Intelligence senior retail analyst Punam Gooyle. Plus, the government has 8 00:00:25,480 --> 00:00:28,800 Speaker 1: been very busy filing lawsuits against big tech. We will 9 00:00:28,800 --> 00:00:31,040 Speaker 1: bring you up to date on the latest anti trust 10 00:00:31,200 --> 00:00:34,600 Speaker 1: litigation with the senior analyst who covers just that topic, 11 00:00:34,760 --> 00:00:38,040 Speaker 1: Jennifer Ree of Bloomberg Intelligence. But we want to begin 12 00:00:38,120 --> 00:00:40,800 Speaker 1: with a closer look at the gas and oil market 13 00:00:40,920 --> 00:00:44,360 Speaker 1: as the official start of summer approaches. For that, we 14 00:00:44,400 --> 00:00:47,839 Speaker 1: are pleased to welcome Stephen Shork, the founder and president 15 00:00:48,159 --> 00:00:52,440 Speaker 1: of the energy industry consultancy the Short Group. Steven, great 16 00:00:52,440 --> 00:00:55,639 Speaker 1: to have you with us as always, But we're speaking 17 00:00:56,280 --> 00:00:58,440 Speaker 1: right in the middle of an East Coast heat wave 18 00:00:58,520 --> 00:01:01,440 Speaker 1: and that has got to put high demand on the 19 00:01:01,600 --> 00:01:05,280 Speaker 1: energy grid. Is demand going to keep a lid on prices? 20 00:01:05,400 --> 00:01:09,759 Speaker 2: Do you think it's an interesting situation here with regard 21 00:01:09,840 --> 00:01:12,480 Speaker 2: to the heat wave. Of course, that translates into air 22 00:01:12,520 --> 00:01:16,520 Speaker 2: conditioning demand, so it's also so therefore it's a bullesh 23 00:01:16,520 --> 00:01:19,560 Speaker 2: boom for the natural gas market. Now, the natural gas 24 00:01:19,600 --> 00:01:22,720 Speaker 2: market did have a nice run up up until about 25 00:01:22,760 --> 00:01:26,200 Speaker 2: a week ago, but it looks like that situation is 26 00:01:26,240 --> 00:01:29,480 Speaker 2: over and we're retracing back into a bear market. Why 27 00:01:30,040 --> 00:01:34,039 Speaker 2: even though we have strong demand, we have very strong supplies, 28 00:01:34,400 --> 00:01:38,759 Speaker 2: and that also translates, Nathan into the situation with gasoline. 29 00:01:39,080 --> 00:01:41,800 Speaker 2: We are at the peak season or just beginning with 30 00:01:42,080 --> 00:01:45,800 Speaker 2: the peak season, you know, right from Memorial Day through 31 00:01:45,880 --> 00:01:48,480 Speaker 2: July and August, of course, and when we look at 32 00:01:48,480 --> 00:01:52,360 Speaker 2: the supply situation from either a year over year basis, 33 00:01:52,640 --> 00:01:56,840 Speaker 2: where we're looking at inventories now in and around New 34 00:01:56,920 --> 00:01:59,440 Speaker 2: York Harbor, which is where you take delivery of the 35 00:01:59,440 --> 00:02:03,120 Speaker 2: New York Mark until Exchanges gasoline contract and down in 36 00:02:03,240 --> 00:02:06,080 Speaker 2: Pad three, which is the Gulf Coast refinery at the center. 37 00:02:06,520 --> 00:02:09,560 Speaker 2: So those two market areas are the most important market 38 00:02:09,600 --> 00:02:13,520 Speaker 2: areas as far as East Coast drivers are concerned, because 39 00:02:13,520 --> 00:02:17,040 Speaker 2: you manufacture gasoline in Philadelphia and New York Delaware, and 40 00:02:17,080 --> 00:02:19,200 Speaker 2: then you get the rest of it along the Colonial 41 00:02:19,200 --> 00:02:22,280 Speaker 2: pipeline that gets shipped up from the North coast. So 42 00:02:22,600 --> 00:02:25,480 Speaker 2: when we look at the inventories in those two particular 43 00:02:25,520 --> 00:02:28,919 Speaker 2: market areas, we're looking at a surplus on a year 44 00:02:29,000 --> 00:02:32,400 Speaker 2: over year of three point nine million barrels and a 45 00:02:32,480 --> 00:02:36,560 Speaker 2: one point three million barrel surplus to the seasonal time 46 00:02:36,680 --> 00:02:39,760 Speaker 2: series analysis. So whether we're looking on a year over 47 00:02:39,880 --> 00:02:44,040 Speaker 2: year basis or on a seasonally adjusted basis, supplies as 48 00:02:44,040 --> 00:02:47,880 Speaker 2: we go into the summer driving season are very comfortable 49 00:02:47,919 --> 00:02:48,640 Speaker 2: at this point. 50 00:02:48,840 --> 00:02:53,000 Speaker 1: So do you see that supply demand imbalance coming more 51 00:02:53,080 --> 00:02:57,080 Speaker 1: into balance as we get further into the summer driving season? 52 00:02:57,200 --> 00:03:00,600 Speaker 1: Is demand going to continue even when we we you know, 53 00:03:00,720 --> 00:03:04,800 Speaker 1: have these forecasts of a demand slowdown in global energy. 54 00:03:04,960 --> 00:03:07,600 Speaker 2: Yeah, it will be, and that is contingent on, of course, 55 00:03:07,840 --> 00:03:11,919 Speaker 2: an economics slowdown. So that is certainly a secondary driver 56 00:03:12,440 --> 00:03:14,760 Speaker 2: to prices in the near term. That that is more 57 00:03:14,840 --> 00:03:17,880 Speaker 2: of a long term bearers driver. But as far as 58 00:03:17,880 --> 00:03:21,880 Speaker 2: the summer goes, this is a spot market driven contract 59 00:03:21,880 --> 00:03:26,200 Speaker 2: at this point and therefore the market Nathan is based on. 60 00:03:26,320 --> 00:03:30,000 Speaker 2: Pricing is in balance. That is to say that when 61 00:03:30,000 --> 00:03:32,560 Speaker 2: we look at crude oil prices, for instance, the New 62 00:03:32,639 --> 00:03:36,440 Speaker 2: York WTI market, it's been yo yoing in between the 63 00:03:36,440 --> 00:03:40,800 Speaker 2: middle eighties and the middle seventies, with the mean thus 64 00:03:40,840 --> 00:03:45,240 Speaker 2: far this quarter right around eighty one eighty one dollars 65 00:03:45,240 --> 00:03:49,480 Speaker 2: and twenty cents. Now our modeling coming into the second quarter, 66 00:03:49,880 --> 00:03:53,200 Speaker 2: the central tendency or the median in our model's output 67 00:03:53,440 --> 00:03:56,960 Speaker 2: was eighty one sixty, So we're right there. We're very 68 00:03:57,000 --> 00:04:00,720 Speaker 2: stable market and the stable market Nathan again going into 69 00:04:01,040 --> 00:04:03,600 Speaker 2: I think it's intuitive you have a stable market, that's 70 00:04:03,640 --> 00:04:07,560 Speaker 2: a telltale that the market is in balance. And more importantly, Nathan, 71 00:04:07,800 --> 00:04:10,680 Speaker 2: when we look at the futures market to spread the 72 00:04:10,800 --> 00:04:15,600 Speaker 2: differential and prices between July and August, September, October, this 73 00:04:15,760 --> 00:04:22,440 Speaker 2: gives you the market's view of any potential imbalances coming 74 00:04:22,560 --> 00:04:25,760 Speaker 2: on the horizon. And what we're seeing there is not 75 00:04:25,800 --> 00:04:28,479 Speaker 2: only we're seeing in market that is balanced, but the 76 00:04:28,520 --> 00:04:31,359 Speaker 2: way the spread markets are trading, that is, July is 77 00:04:31,440 --> 00:04:34,960 Speaker 2: losing value to August, August is losing its value relative 78 00:04:35,000 --> 00:04:37,840 Speaker 2: to September. This is a telltale that when we do 79 00:04:38,000 --> 00:04:40,279 Speaker 2: see the imbalance, the market thinks we're going to have 80 00:04:40,360 --> 00:04:43,559 Speaker 2: too much supply not enough enough demand, and of course 81 00:04:43,600 --> 00:04:49,200 Speaker 2: that's going to translate into much more appetizing prices at 82 00:04:49,240 --> 00:04:50,600 Speaker 2: the pump for consumers. 83 00:04:50,760 --> 00:04:55,240 Speaker 1: How appetizing would you say? How accommodating are these gasoline 84 00:04:55,480 --> 00:04:59,080 Speaker 1: retailers going to be to the driving public this summer, 85 00:04:59,080 --> 00:04:59,440 Speaker 1: do you think? 86 00:04:59,520 --> 00:05:02,480 Speaker 2: Well, the great think about gasoline retailers is that there 87 00:05:02,560 --> 00:05:06,240 Speaker 2: are one hundred and forty five thousand retailers in the 88 00:05:06,279 --> 00:05:10,279 Speaker 2: lower forty eight United States. So that's a lot of competition. 89 00:05:10,800 --> 00:05:15,960 Speaker 2: In my hometown in Villanova suburbs of Philadelphia, we have 90 00:05:16,200 --> 00:05:21,680 Speaker 2: virtually a gasoline station on every block. Therefore, that competition 91 00:05:21,920 --> 00:05:25,960 Speaker 2: will certainly keep a lid on prices. Now, of course, 92 00:05:26,000 --> 00:05:28,680 Speaker 2: there will be higher prices in the summer. There are 93 00:05:28,720 --> 00:05:31,280 Speaker 2: always our higher prices in the summer for two very 94 00:05:31,320 --> 00:05:35,320 Speaker 2: obvious reasons. One of course, is demand. We're going to 95 00:05:35,400 --> 00:05:37,960 Speaker 2: hit the pinnacle of our demand in July and August. 96 00:05:38,160 --> 00:05:40,680 Speaker 2: And the second driver is the type of gasoline we 97 00:05:40,720 --> 00:05:43,000 Speaker 2: have to put in our car. It's what's called the 98 00:05:43,120 --> 00:05:46,159 Speaker 2: summer grade gasoline. And when we have to acquire the 99 00:05:46,240 --> 00:05:50,960 Speaker 2: seed stocks that go into making that cocktail of gasoline, 100 00:05:51,320 --> 00:05:53,920 Speaker 2: the seed stocks we use the summer are much more 101 00:05:53,960 --> 00:05:56,799 Speaker 2: expensive than what we can use in the winter. Therefore, 102 00:05:56,839 --> 00:06:00,640 Speaker 2: the manufacturing, the blending of gasoline is more offensive so 103 00:06:01,000 --> 00:06:05,880 Speaker 2: we will see gasoline prices higher, But the retailers. I 104 00:06:05,920 --> 00:06:09,159 Speaker 2: think this is important because I think the retailers they're 105 00:06:09,200 --> 00:06:11,440 Speaker 2: the ones who bear the brunt of it because they're 106 00:06:11,480 --> 00:06:15,000 Speaker 2: on the firing line. But ask yourself, why does a 107 00:06:15,040 --> 00:06:19,000 Speaker 2: gastline station retailer always have a convenience store or an 108 00:06:19,040 --> 00:06:23,160 Speaker 2: auto mechanic garage adjacent to it, Because that's where they 109 00:06:23,200 --> 00:06:26,599 Speaker 2: make their money. They don't make their money on gasoline. 110 00:06:26,760 --> 00:06:29,599 Speaker 2: Their margins are that thin they have to make it 111 00:06:29,720 --> 00:06:33,560 Speaker 2: up elsewhere. So it will be contingent on oil prices, 112 00:06:33,560 --> 00:06:37,520 Speaker 2: which again have been very stable, and the retailers, because 113 00:06:37,560 --> 00:06:41,560 Speaker 2: of this competition, they will not be quote unquote gouging 114 00:06:41,640 --> 00:06:42,800 Speaker 2: the consumer this summer. 115 00:06:43,000 --> 00:06:45,800 Speaker 1: Speaking with Steven Short, the founder and president of the 116 00:06:45,839 --> 00:06:50,799 Speaker 1: Short Group, which consults on the energy industry, and given 117 00:06:50,880 --> 00:06:54,400 Speaker 1: this backdrop, Steven, the stability that you see in the 118 00:06:54,440 --> 00:06:57,240 Speaker 1: gasoline market, I'm curious to get your take as well 119 00:06:57,680 --> 00:07:02,560 Speaker 1: on the decision by OPEC and OPEQ plus to continue 120 00:07:03,000 --> 00:07:08,080 Speaker 1: with supply constraints into next year. What kind of read 121 00:07:08,160 --> 00:07:11,960 Speaker 1: through that potentially could have even longer term as we 122 00:07:12,000 --> 00:07:13,000 Speaker 1: get past the summer. 123 00:07:13,200 --> 00:07:19,280 Speaker 2: Yeah, absolutely, it is certainly a barished telltale because they 124 00:07:19,360 --> 00:07:22,160 Speaker 2: came out with a rather dubbish statement of the last 125 00:07:22,200 --> 00:07:25,800 Speaker 2: meeting that they'll start to curtail these quotas later on 126 00:07:26,000 --> 00:07:29,840 Speaker 2: in the year. And when we look at and it's 127 00:07:29,840 --> 00:07:33,160 Speaker 2: really not surprised because what OPEK, because I've had the 128 00:07:33,200 --> 00:07:35,320 Speaker 2: opportunity to work with OPEC, so I do know this 129 00:07:35,440 --> 00:07:39,360 Speaker 2: firsthand that they will look at the structure of the 130 00:07:39,400 --> 00:07:43,160 Speaker 2: forward market. So there is that curve. There's a price 131 00:07:43,240 --> 00:07:46,480 Speaker 2: for oil every single month going out for the next 132 00:07:46,520 --> 00:07:49,680 Speaker 2: ten years, so they look at the formation of that 133 00:07:49,800 --> 00:07:53,040 Speaker 2: curve and what the curve has been telling us in 134 00:07:53,080 --> 00:07:55,760 Speaker 2: the past six months, whether we're looking at the three 135 00:07:55,920 --> 00:07:59,000 Speaker 2: main oil contracts that trade around the globe of the 136 00:07:59,080 --> 00:08:02,800 Speaker 2: NIMES contract hearing in the US, the Brent contract which 137 00:08:02,880 --> 00:08:08,640 Speaker 2: is a London based contract, and then they do buy contract. 138 00:08:08,680 --> 00:08:11,880 Speaker 2: And when we look at the forward pricing, we're looking 139 00:08:11,960 --> 00:08:16,040 Speaker 2: at a market that is certainly signaling that the barrels 140 00:08:16,080 --> 00:08:19,320 Speaker 2: that are coming closer to delivery are cheaper or are 141 00:08:19,360 --> 00:08:23,720 Speaker 2: losing their value to the longer dated contracts. So what 142 00:08:23,760 --> 00:08:27,720 Speaker 2: this tells you is that the expectation is for weaker 143 00:08:27,840 --> 00:08:31,240 Speaker 2: demand going beyond the summer and through the end of 144 00:08:31,280 --> 00:08:34,240 Speaker 2: this year, and certainly this is the way I think 145 00:08:34,280 --> 00:08:36,960 Speaker 2: OPEC is looking at the market situation. 146 00:08:37,240 --> 00:08:39,040 Speaker 1: Is that something that you agree with that we are 147 00:08:39,080 --> 00:08:42,840 Speaker 1: going to see a continued slow down in global demand 148 00:08:42,920 --> 00:08:44,600 Speaker 1: given where things are this summer? 149 00:08:44,760 --> 00:08:48,200 Speaker 2: Yes, I do. I think for two reasons. One, the 150 00:08:48,320 --> 00:08:52,600 Speaker 2: US consumer is completely tapped out with credit card debt 151 00:08:52,760 --> 00:08:56,960 Speaker 2: these high interest rates. We know that household debt is 152 00:08:57,000 --> 00:09:00,400 Speaker 2: got record highs, now, credit card debt at record highs, 153 00:09:00,440 --> 00:09:03,000 Speaker 2: and so forth, so we do know. And then now 154 00:09:03,040 --> 00:09:06,400 Speaker 2: what Maason, what we're starting to see is a delinquency 155 00:09:06,520 --> 00:09:09,000 Speaker 2: rate on credit card payments that are ninety days in 156 00:09:09,000 --> 00:09:12,160 Speaker 2: the arrears. We're starting to see that now at highs 157 00:09:12,160 --> 00:09:16,040 Speaker 2: we have not seen since before the Great Recession. So 158 00:09:16,120 --> 00:09:19,480 Speaker 2: clearly the consumer is tapped out. Now that doesn't mean 159 00:09:19,520 --> 00:09:22,640 Speaker 2: they won't tap out more on their credit cards, but 160 00:09:22,720 --> 00:09:27,960 Speaker 2: certainly consumer spending will certainly take a hit. And because 161 00:09:28,600 --> 00:09:31,960 Speaker 2: you don't have to drive to the Jersey Shore, you 162 00:09:32,000 --> 00:09:34,160 Speaker 2: can stand in your backyard and run a hose over 163 00:09:34,200 --> 00:09:38,400 Speaker 2: your head, your demand is much greater or much more 164 00:09:38,440 --> 00:09:42,040 Speaker 2: susceptible to these high prices. So yes, the answer that question, 165 00:09:42,440 --> 00:09:47,280 Speaker 2: I do see constraints on demand because even though gasoline 166 00:09:47,320 --> 00:09:50,520 Speaker 2: prices are cheaper than a year ago. The consumer is 167 00:09:50,520 --> 00:09:52,920 Speaker 2: in a much worse place than they were a year ago. 168 00:09:53,080 --> 00:09:54,959 Speaker 2: So it's a little bit of both here. 169 00:09:55,120 --> 00:09:58,720 Speaker 1: To that point, Stephen, we've had predictions many times over 170 00:09:58,760 --> 00:10:01,240 Speaker 1: the past few months about that the consumer is going 171 00:10:01,280 --> 00:10:03,640 Speaker 1: to crack, even if we are starting to see some 172 00:10:03,720 --> 00:10:06,480 Speaker 1: of those signs come through now, I mean, what's the 173 00:10:06,520 --> 00:10:10,000 Speaker 1: possibility that we could continue to see the consumer power 174 00:10:10,160 --> 00:10:12,679 Speaker 1: through like they seem to have done over the last 175 00:10:12,720 --> 00:10:15,080 Speaker 1: few months, defying some of the predictions. 176 00:10:15,240 --> 00:10:21,880 Speaker 2: Yeah. Absolutely, that has been a major surprise, certainly to me. 177 00:10:22,480 --> 00:10:27,520 Speaker 2: But there are other signs. As we said now a 178 00:10:27,600 --> 00:10:32,000 Speaker 2: year ago people defaulting or not making their credit card payments, 179 00:10:32,240 --> 00:10:35,640 Speaker 2: even minimum payments with half of what it is today 180 00:10:35,720 --> 00:10:39,439 Speaker 2: that are defaulting or delinquent, I should say. So that 181 00:10:39,960 --> 00:10:46,040 Speaker 2: is a clear telltale. Also when we look at the 182 00:10:46,160 --> 00:10:49,400 Speaker 2: jobs numbers. Now we're looking at the jobs numbers and 183 00:10:49,480 --> 00:10:53,439 Speaker 2: the establishment and the households. You have two different surveys, 184 00:10:53,840 --> 00:10:58,240 Speaker 2: and there is a considerable deficit between these two. The 185 00:10:58,440 --> 00:11:02,360 Speaker 2: establishment survey, which is the one that the market trades on, 186 00:11:02,559 --> 00:11:08,360 Speaker 2: which has beaten expectations by the biggest Wall Street banks 187 00:11:08,360 --> 00:11:11,480 Speaker 2: have been wrong on the jobs number month in, month 188 00:11:11,600 --> 00:11:14,600 Speaker 2: out for the past year. So what is going on there? 189 00:11:14,640 --> 00:11:18,160 Speaker 2: These are very good economists. What are they missing? Well, 190 00:11:18,200 --> 00:11:21,120 Speaker 2: part of the missing is the way they calculate, that 191 00:11:21,320 --> 00:11:23,640 Speaker 2: is to say, the way the Bureau of Labor Statistics 192 00:11:23,679 --> 00:11:29,280 Speaker 2: calculates their numbers. They're making some assumptions that that are 193 00:11:29,360 --> 00:11:32,560 Speaker 2: pretty grandy oaks when it comes to the amount of 194 00:11:32,640 --> 00:11:38,360 Speaker 2: new businesses being created, which factors into statistically what they 195 00:11:38,520 --> 00:11:42,360 Speaker 2: think the new jobs being created are. All it is 196 00:11:42,360 --> 00:11:45,080 Speaker 2: is a statistical number that they are guessing at and 197 00:11:45,120 --> 00:11:47,880 Speaker 2: putting in and when you look at this adjustment, it 198 00:11:47,960 --> 00:11:51,240 Speaker 2: is very high relative to what we've seen in the past. 199 00:11:51,559 --> 00:11:54,440 Speaker 2: So where I'm going with this, Nathan, is perhaps the 200 00:11:54,520 --> 00:11:57,679 Speaker 2: jobs market, which continues to beat on the headline numbers. 201 00:11:57,920 --> 00:12:00,000 Speaker 2: If you just dig into the weeds a little bit, 202 00:12:00,520 --> 00:12:03,120 Speaker 2: the job situation in this country is not as rosy 203 00:12:03,160 --> 00:12:06,360 Speaker 2: as the headline number would suggest. So now you marry 204 00:12:06,520 --> 00:12:11,800 Speaker 2: that with tap dot consumers and inflation which is still high. 205 00:12:11,960 --> 00:12:15,240 Speaker 2: Granted that inflation might only be grown at four percent 206 00:12:15,360 --> 00:12:17,880 Speaker 2: this year. That's four percent on top of the twenty 207 00:12:17,920 --> 00:12:21,080 Speaker 2: percent it's grown over the past three years. So we're 208 00:12:21,120 --> 00:12:24,120 Speaker 2: looking at a market. So to answer your question. It's great. 209 00:12:24,280 --> 00:12:30,040 Speaker 2: Who knows ken consumer continue to power on perhaps, but 210 00:12:30,160 --> 00:12:34,080 Speaker 2: we do know that they're facing a considerable wall and 211 00:12:34,480 --> 00:12:37,160 Speaker 2: eventually at one point they're going to have to cry 212 00:12:37,320 --> 00:12:41,040 Speaker 2: uncle when that is. Your guess is as good as mine. 213 00:12:41,160 --> 00:12:43,560 Speaker 1: Thank you for this. Stephen, really great having on with us. 214 00:12:43,679 --> 00:12:47,000 Speaker 1: Matt Stephen Short, founder and president of the Short Group. 215 00:12:47,240 --> 00:12:49,200 Speaker 1: And coming up next we'll take a closer look at 216 00:12:49,240 --> 00:12:51,640 Speaker 1: the health of the country's retailers. Will be speaking with 217 00:12:51,720 --> 00:12:55,040 Speaker 1: Bert Flickinger of Strategic Resource Group and put them Goyle, 218 00:12:55,160 --> 00:12:59,360 Speaker 1: senior retail analysts at Bloomberg Intelligence. It's twenty minutes past 219 00:12:59,400 --> 00:13:06,960 Speaker 1: the hour, Nathan Hager, and this is Bloomberg Welcome back 220 00:13:07,000 --> 00:13:10,640 Speaker 1: to this special edition of Bloomberg Daybreak. US markets are 221 00:13:10,679 --> 00:13:13,640 Speaker 1: closed for the June teen holiday. I'm Nathan Hager. Thanks 222 00:13:13,720 --> 00:13:16,120 Speaker 1: for joining us. We want to turn our attention now 223 00:13:16,160 --> 00:13:18,720 Speaker 1: to the health of the country's retailers, and for that 224 00:13:18,760 --> 00:13:21,960 Speaker 1: we have a special holiday roundtable for you. Joining us 225 00:13:22,000 --> 00:13:26,800 Speaker 1: now Bert Flickinger, Managing director at Strategic Resource Group, along 226 00:13:26,840 --> 00:13:31,000 Speaker 1: with Punham Goyle, senior US retail analyst at Bloomberg Intelligence. 227 00:13:31,040 --> 00:13:32,719 Speaker 1: It's great to have the both of you with us 228 00:13:33,120 --> 00:13:35,800 Speaker 1: on this holiday, and we are doing this as we 229 00:13:35,840 --> 00:13:39,240 Speaker 1: come off the latest read on retail sales, we are 230 00:13:39,320 --> 00:13:44,080 Speaker 1: still seeing signs of slow down in the American consumer. Bert, 231 00:13:44,120 --> 00:13:47,240 Speaker 1: I'll start with you, what does this slowdown mean in 232 00:13:47,320 --> 00:13:48,880 Speaker 1: terms of where we could go for the rest of 233 00:13:48,960 --> 00:13:49,720 Speaker 1: the summer. 234 00:13:49,559 --> 00:13:52,839 Speaker 3: Nathan, As you reference the monthly retail sales reported on 235 00:13:52,920 --> 00:13:56,880 Speaker 3: the Bloomberg terminal yesterday Tuesday, it's stick an ask. It's 236 00:13:56,960 --> 00:13:59,240 Speaker 3: the worst of times for retailers. It's the best of 237 00:13:59,280 --> 00:14:04,600 Speaker 3: times of times for retailers like Kroger and Costco. Costco 238 00:14:04,679 --> 00:14:09,160 Speaker 3: hit a fifty two week high. Kroger's doing a very constructive, 239 00:14:09,679 --> 00:14:14,000 Speaker 3: well intentioned merger with Albertson's the lower prices to consumers 240 00:14:14,040 --> 00:14:18,079 Speaker 3: even more as consumers are fighting record inflation, which you're 241 00:14:18,080 --> 00:14:20,960 Speaker 3: seeing in the rest of retail. Nathan. That the only 242 00:14:21,000 --> 00:14:24,160 Speaker 3: other elements other than food retail that are doing well 243 00:14:24,240 --> 00:14:28,880 Speaker 3: or off price, led by TJX and other off price, 244 00:14:28,960 --> 00:14:33,920 Speaker 3: with a handful of specialty retailers also putting together strong 245 00:14:34,000 --> 00:14:34,600 Speaker 3: results too. 246 00:14:35,120 --> 00:14:38,840 Speaker 1: Speaking of specialty retailers, Punham, I know you cover those, 247 00:14:38,920 --> 00:14:42,600 Speaker 1: particularly in the specialty apparel space. Is it a best 248 00:14:42,600 --> 00:14:45,320 Speaker 1: of time's worst of time situation in your world as well. 249 00:14:45,400 --> 00:14:47,400 Speaker 4: Well, I think there is a confluence of events that 250 00:14:47,440 --> 00:14:49,720 Speaker 4: are happening. So you do have a weaker consumer that's 251 00:14:49,760 --> 00:14:52,880 Speaker 4: spending less undiscretionary, but at the same time, you have 252 00:14:52,960 --> 00:14:55,920 Speaker 4: this fashion cycle where consumers are out and about more 253 00:14:56,240 --> 00:14:58,720 Speaker 4: so they are spending a little more in apparel. They're 254 00:14:58,760 --> 00:15:01,480 Speaker 4: just deciding where to go. So we think in this case, 255 00:15:01,840 --> 00:15:04,760 Speaker 4: the retailers that are benefiting with a play on value 256 00:15:05,120 --> 00:15:07,880 Speaker 4: are some of the ones that we've seen rise very fast. 257 00:15:07,920 --> 00:15:12,120 Speaker 4: Those you know, Chinese based or originated retailers, whether it's 258 00:15:12,120 --> 00:15:15,960 Speaker 4: Shean or Temu, They're they're starting to take share. And 259 00:15:16,000 --> 00:15:18,920 Speaker 4: then the Walmarts of the world, we've seen that they've 260 00:15:18,920 --> 00:15:22,240 Speaker 4: posted strong results and they continue to make their play 261 00:15:22,320 --> 00:15:26,160 Speaker 4: for value, drive consumer interest, whether it's the high end 262 00:15:26,280 --> 00:15:28,480 Speaker 4: now or even you know, continue to keep the mid 263 00:15:28,520 --> 00:15:29,560 Speaker 4: and low tier consumer. 264 00:15:30,080 --> 00:15:34,000 Speaker 1: Well, if we do bert continue to see pile into 265 00:15:34,360 --> 00:15:39,080 Speaker 1: sort of lower priced retail names and sectors, what could 266 00:15:39,160 --> 00:15:42,440 Speaker 1: that mean for some of the higher price point companies. 267 00:15:42,480 --> 00:15:44,880 Speaker 1: Are they going to have to start bringing in sales 268 00:15:44,920 --> 00:15:45,440 Speaker 1: this summer. 269 00:15:45,720 --> 00:15:49,160 Speaker 3: Yes, the higher price companies will have to bring in sales, 270 00:15:49,240 --> 00:15:52,000 Speaker 3: and it's going to be tough. In a presidential year 271 00:15:52,080 --> 00:15:56,120 Speaker 3: with record ad spending and costs to bring in that consumer. 272 00:15:56,160 --> 00:15:59,760 Speaker 3: And also what's interesting is in our strategic Resource group 273 00:16:00,480 --> 00:16:04,480 Speaker 3: analyzes chain drug, which is normally a safe harbor and 274 00:16:04,760 --> 00:16:09,840 Speaker 3: typically good and affordability, is struggling. Walgreens down seventy five 275 00:16:10,440 --> 00:16:14,800 Speaker 3: five years, write a down ninety nine point seven CBS 276 00:16:14,920 --> 00:16:18,840 Speaker 3: down fifteen percent. Walmart wins. As Poonam said, and you said, 277 00:16:18,920 --> 00:16:23,640 Speaker 3: Nathan and Kroger Elbertson's with over four thousand pharmacy went. 278 00:16:23,920 --> 00:16:29,120 Speaker 3: Pharmacies win and consumers win. But unless it's everyday low 279 00:16:29,200 --> 00:16:35,680 Speaker 3: price or price impact like Costco, like Winco, like TJX, Ross, 280 00:16:35,760 --> 00:16:40,120 Speaker 3: Dress for Last, et cetera, promotional will still be a 281 00:16:40,120 --> 00:16:43,160 Speaker 3: big part of the playbook for Macy's and others, but 282 00:16:43,200 --> 00:16:47,760 Speaker 3: it'll be tougher to track customers. As Punham reference that 283 00:16:47,960 --> 00:16:51,560 Speaker 3: shoppers are spending for want, not for need. 284 00:16:51,880 --> 00:16:55,440 Speaker 1: So in terms of the retail names that you cover, Poonam, 285 00:16:55,720 --> 00:16:59,800 Speaker 1: how could that play out for names like some of 286 00:16:59,800 --> 00:17:03,240 Speaker 1: those apparel companies that you look at, are they going 287 00:17:03,320 --> 00:17:05,160 Speaker 1: to start discounting as well? 288 00:17:05,760 --> 00:17:08,480 Speaker 4: They will start discounting. I mean, discounts will definitely come 289 00:17:08,520 --> 00:17:10,800 Speaker 4: into play. And sometimes it's not a function of the 290 00:17:10,800 --> 00:17:13,760 Speaker 4: inventory that they have at hand. But it's the neighbors, right, 291 00:17:13,800 --> 00:17:16,400 Speaker 4: So if the stores around you are discounting, you need 292 00:17:16,440 --> 00:17:18,760 Speaker 4: to show the value proposition too. But there is a 293 00:17:18,760 --> 00:17:21,320 Speaker 4: group that I cover that I think benefits in this environment, 294 00:17:21,320 --> 00:17:24,280 Speaker 4: and that's the resale companies like Rent the Runway, like 295 00:17:24,359 --> 00:17:28,399 Speaker 4: thread Up, Poshmark. These companies have a resale element to 296 00:17:28,480 --> 00:17:32,320 Speaker 4: them and eBay and they drive the value message across 297 00:17:32,359 --> 00:17:34,880 Speaker 4: pretty nicely. So we think that they're going to benefit 298 00:17:34,880 --> 00:17:35,320 Speaker 4: in all of this. 299 00:17:36,080 --> 00:17:40,639 Speaker 1: And Bert, what about the interplay between brick and mortar 300 00:17:40,680 --> 00:17:44,359 Speaker 1: stores and e commerce? How do you see that playing 301 00:17:44,359 --> 00:17:45,320 Speaker 1: out into the summertime. 302 00:17:45,480 --> 00:17:50,560 Speaker 3: We're seeing Internet sales trailing twelve month growth rate below 303 00:17:50,640 --> 00:17:53,920 Speaker 3: seven percent for a long time, so still strong, still 304 00:17:53,960 --> 00:17:56,840 Speaker 3: stronger than the rest of retail. But people are going 305 00:17:56,840 --> 00:18:00,160 Speaker 3: to bricks and mortar because, as Punam said, they're own 306 00:18:00,200 --> 00:18:03,680 Speaker 3: to Walmart, they're going to Target, they're going to Costco, 307 00:18:03,840 --> 00:18:06,760 Speaker 3: aldi in Kroger, and they want to see the produce 308 00:18:06,800 --> 00:18:10,760 Speaker 3: and see the meat, especially with meat prices soaring because 309 00:18:10,760 --> 00:18:14,480 Speaker 3: of a b and bird flow affecting first the poultry 310 00:18:15,440 --> 00:18:21,639 Speaker 3: flocks but now transferring over to livestock, so egg prices, 311 00:18:21,760 --> 00:18:26,840 Speaker 3: especially for meat pork poultry are the highest in years, 312 00:18:26,880 --> 00:18:30,160 Speaker 3: with poultry still a value, but maybe not for long. 313 00:18:30,240 --> 00:18:32,600 Speaker 1: Of course, a lot of those names that Bert just 314 00:18:32,720 --> 00:18:36,560 Speaker 1: referenced have some e commerce business of their own Punham, 315 00:18:37,960 --> 00:18:42,560 Speaker 1: Do you see any interplay there, some divergence between foot 316 00:18:42,640 --> 00:18:44,800 Speaker 1: traffic and clicks. 317 00:18:45,480 --> 00:18:48,160 Speaker 4: Yeah. Look, I think you know, for grocery, it's still 318 00:18:48,200 --> 00:18:50,879 Speaker 4: a largely brick and mortar business, so I think consumers 319 00:18:50,920 --> 00:18:54,560 Speaker 4: will prefer that channel for the foreseeable future as the 320 00:18:54,560 --> 00:18:57,560 Speaker 4: way they shop for their produce, especially, But when you 321 00:18:57,560 --> 00:18:59,879 Speaker 4: talk about the off price retailers that were just mentioned 322 00:19:00,080 --> 00:19:03,159 Speaker 4: don't have a clicks business. Teach X is a very 323 00:19:03,200 --> 00:19:06,440 Speaker 4: small online presence, so for those stores, if you want 324 00:19:06,440 --> 00:19:08,679 Speaker 4: the value, you have to go into them. But on 325 00:19:08,760 --> 00:19:11,880 Speaker 4: the same front, retailers like Amazon, which you know you're 326 00:19:11,920 --> 00:19:15,040 Speaker 4: shopping online. The reason to go to Amazon is because 327 00:19:15,080 --> 00:19:16,840 Speaker 4: you can get the breadth of offering and you can 328 00:19:16,880 --> 00:19:20,400 Speaker 4: get the convenience and the items same day, next day. 329 00:19:20,440 --> 00:19:23,280 Speaker 4: So I think that's still a medium that people will 330 00:19:23,320 --> 00:19:26,040 Speaker 4: want to shop at because they want their things quickly, 331 00:19:26,119 --> 00:19:28,919 Speaker 4: and some people still don't like going to stores for 332 00:19:29,240 --> 00:19:31,439 Speaker 4: some of the stuff that can be replenished automatically, and 333 00:19:31,440 --> 00:19:32,840 Speaker 4: they don't need to feel in touch. 334 00:19:33,640 --> 00:19:37,919 Speaker 1: Speaking with Punam Goyle, senior US retail analyst at Bloomberg Intelligence, 335 00:19:37,960 --> 00:19:43,320 Speaker 1: along with Bert Flickinger, the Managing director of Strategic Resource Group, Bert, 336 00:19:43,359 --> 00:19:46,440 Speaker 1: I know something you follow in particular is the impact 337 00:19:46,440 --> 00:19:50,480 Speaker 1: of movie attendance on brick and mortar mall traffic. It 338 00:19:50,480 --> 00:19:52,280 Speaker 1: seems like it's been kind of hit or miss. I mean, 339 00:19:52,280 --> 00:19:55,920 Speaker 1: we just had a record weekend for the new Pixar sequel. 340 00:19:56,000 --> 00:20:00,600 Speaker 1: Some other movies haven't done as well. What could this 341 00:20:00,760 --> 00:20:06,240 Speaker 1: mean for malls in terms of this cinema traffic that 342 00:20:06,480 --> 00:20:08,080 Speaker 1: in a lot of ways they've had to come to 343 00:20:08,119 --> 00:20:09,880 Speaker 1: rely on in recent years. 344 00:20:09,800 --> 00:20:12,520 Speaker 3: Nathan, you synthesize it very well, hit or missed with 345 00:20:13,040 --> 00:20:17,960 Speaker 3: fewer theatrical releases as a carryover from the understandable artists 346 00:20:18,000 --> 00:20:23,840 Speaker 3: and writers strike, so fewer properties from Disney, Marvel, etc. 347 00:20:24,200 --> 00:20:27,359 Speaker 3: From the major studios, so new releases don't come to 348 00:20:27,400 --> 00:20:32,200 Speaker 3: the rescue Nathan until after the December holidays. In the meantime, 349 00:20:32,240 --> 00:20:35,159 Speaker 3: to your point, customer counsel are down thirty percent, and 350 00:20:35,200 --> 00:20:38,119 Speaker 3: a lot to the movies at the malls, and a 351 00:20:38,160 --> 00:20:41,239 Speaker 3: lot of those customers cross over and shop after they 352 00:20:41,280 --> 00:20:45,399 Speaker 3: go to the movies, especially families with large presence of 353 00:20:45,480 --> 00:20:50,040 Speaker 3: children or caregivers going with children. So at a time 354 00:20:50,080 --> 00:20:54,480 Speaker 3: that the malls are suffering and Walmart's abandoning tens of 355 00:20:54,520 --> 00:20:59,600 Speaker 3: millions of square feet of real estate that reached their 356 00:20:59,640 --> 00:21:03,640 Speaker 3: plan absolescence, some of the co anchors are either going 357 00:21:03,680 --> 00:21:07,080 Speaker 3: bankrupt or where they're just segueing out as Walmart and 358 00:21:07,119 --> 00:21:12,600 Speaker 3: Amazon do. And so it's very concerning crossroads for retail 359 00:21:12,640 --> 00:21:15,199 Speaker 3: this summer, especially with the movie drop off for the 360 00:21:15,240 --> 00:21:16,320 Speaker 3: first time in a decade. 361 00:21:16,560 --> 00:21:19,720 Speaker 1: Curious to get your view on the mall outlook as well, Punam. 362 00:21:19,760 --> 00:21:22,679 Speaker 1: I know you spent a fair amount of time in 363 00:21:22,720 --> 00:21:23,800 Speaker 1: the outlets as well. 364 00:21:24,080 --> 00:21:26,679 Speaker 4: Yeah. I think Look, mall traffic has been challenged for 365 00:21:26,760 --> 00:21:29,400 Speaker 4: over a decade now and I don't see that changing 366 00:21:29,920 --> 00:21:32,520 Speaker 4: regardless of where we go in the future. I see 367 00:21:32,560 --> 00:21:35,840 Speaker 4: that there is a shift more growing to digital, which 368 00:21:35,880 --> 00:21:39,680 Speaker 4: is going to continue to really deter especially the lower 369 00:21:39,760 --> 00:21:42,359 Speaker 4: quality malls. Right. I think the A malls like the 370 00:21:42,359 --> 00:21:45,760 Speaker 4: Short Hills Mall in New Jersey, they'll have traffic. But 371 00:21:45,800 --> 00:21:48,120 Speaker 4: when you go to some of these other malls when 372 00:21:48,160 --> 00:21:50,840 Speaker 4: they lose the anchors, as brit just said, that the 373 00:21:50,920 --> 00:21:54,359 Speaker 4: traffic really falls off, and that's going to continue to 374 00:21:54,440 --> 00:21:57,400 Speaker 4: hurt the mall cycle in the stores within those malls. 375 00:21:57,320 --> 00:22:01,640 Speaker 1: Anything else besides movie theater, they can keep them all 376 00:22:01,920 --> 00:22:02,760 Speaker 1: business going. 377 00:22:02,800 --> 00:22:09,040 Speaker 3: Bird BJS and Costco are constructively converting former Macy's, former Seers, 378 00:22:09,119 --> 00:22:13,080 Speaker 3: former j C. Pennies to wholesale clubs as his wind 379 00:22:13,160 --> 00:22:16,840 Speaker 3: Co a Esop, which is the highest volume food retailer 380 00:22:16,840 --> 00:22:19,960 Speaker 3: in America and also the lowest price, even lower than Walmart. 381 00:22:20,320 --> 00:22:24,199 Speaker 3: So there is repurposing in the space. But to Punam's 382 00:22:24,440 --> 00:22:28,919 Speaker 3: present point, we're seeing America go from four hundred percent 383 00:22:28,960 --> 00:22:32,000 Speaker 3: over stored a decade ago in terms of retail mall 384 00:22:32,080 --> 00:22:34,760 Speaker 3: space to between one hundred and twenty to one hundred 385 00:22:34,800 --> 00:22:39,399 Speaker 3: and thirty percent over stored, which will be back in 386 00:22:39,560 --> 00:22:43,000 Speaker 3: balance probably a few to no more than five years 387 00:22:43,000 --> 00:22:45,520 Speaker 3: from now. And there's going to be quite a commercial 388 00:22:45,600 --> 00:22:51,240 Speaker 3: quote unquote casualty count with a even viable change closing 389 00:22:51,840 --> 00:22:55,520 Speaker 3: brick and mortar flagship stores and undercapitalized chains going out 390 00:22:55,520 --> 00:22:55,959 Speaker 3: of business. 391 00:22:56,000 --> 00:22:59,159 Speaker 1: We're also going to see America go to Paris in 392 00:22:59,200 --> 00:23:01,720 Speaker 1: the next few weeks for the Summer Olympics. Just to 393 00:23:01,760 --> 00:23:05,960 Speaker 1: think about summer in general. Punam, in your world when 394 00:23:05,960 --> 00:23:08,840 Speaker 1: it comes to apparel sales. Can we see something of 395 00:23:08,880 --> 00:23:10,560 Speaker 1: a Team USA gear bump? 396 00:23:10,680 --> 00:23:13,480 Speaker 4: Yeah. Absolutely. Look, these sporting events are back in full 397 00:23:13,520 --> 00:23:15,679 Speaker 4: motion to how they were a pre pandemic. It's the 398 00:23:15,720 --> 00:23:18,960 Speaker 4: first year, you know, we're really back the way we 399 00:23:19,080 --> 00:23:21,719 Speaker 4: used to watch sports and attend sporting events. We not 400 00:23:21,760 --> 00:23:23,679 Speaker 4: only have the Paris Olympics, though, we also have the 401 00:23:23,680 --> 00:23:27,800 Speaker 4: euro Championships going on, and there's a lot of momentum, 402 00:23:28,000 --> 00:23:30,640 Speaker 4: and there are new launches, whether it's by Nike, Aditas 403 00:23:30,640 --> 00:23:33,160 Speaker 4: whom or the other names that are going to drive 404 00:23:33,240 --> 00:23:36,639 Speaker 4: brand heat, and the teams that win and the endorsers 405 00:23:36,720 --> 00:23:40,960 Speaker 4: behind them are going to gain momentum. And that momentum 406 00:23:41,040 --> 00:23:43,840 Speaker 4: really lasts right. It's brand heat that's driven today that 407 00:23:43,880 --> 00:23:46,440 Speaker 4: will continue for the next six to twelve months because 408 00:23:46,480 --> 00:23:48,840 Speaker 4: those product launches carry on their momentum. 409 00:23:48,920 --> 00:23:50,919 Speaker 1: What do you see as a potential bigger catalyst this 410 00:23:50,960 --> 00:23:53,440 Speaker 1: summer in terms of retail shopping, Bert, is it the 411 00:23:54,000 --> 00:23:56,760 Speaker 1: summer sports or could it be back to school later 412 00:23:56,800 --> 00:23:57,399 Speaker 1: on the summer. 413 00:23:57,560 --> 00:24:00,439 Speaker 3: It's a combination that to Nathan, and also the wild 414 00:24:00,480 --> 00:24:02,720 Speaker 3: card is our family used to be one of the 415 00:24:02,800 --> 00:24:07,919 Speaker 3: largest restaurant suppliers, everything from fast food defined dining, and 416 00:24:07,960 --> 00:24:11,080 Speaker 3: we know the math of McDonald's and BK and everybody else. 417 00:24:11,480 --> 00:24:14,159 Speaker 3: They've raised prices thirty percent over the last two and 418 00:24:14,200 --> 00:24:18,439 Speaker 3: a half years, so we're seeing menu inflation and fast food, 419 00:24:18,480 --> 00:24:22,320 Speaker 3: which means the customer that ten years ago eight eleven 420 00:24:22,359 --> 00:24:25,720 Speaker 3: meals a week away from home and only ten at home, 421 00:24:26,040 --> 00:24:28,840 Speaker 3: that customer is now eating about twenty meals a week 422 00:24:29,119 --> 00:24:34,320 Speaker 3: at home. So they're shifting. They're spending from fast food 423 00:24:34,359 --> 00:24:39,639 Speaker 3: and casual dining in home, where the basic markup for 424 00:24:39,920 --> 00:24:43,080 Speaker 3: McDonald's on food is about seven hundred to nine hundred 425 00:24:43,080 --> 00:24:46,800 Speaker 3: percent over one thousand percent on beverages. So for the 426 00:24:46,800 --> 00:24:50,639 Speaker 3: Bloomberg terminal math and for the consumer at home, you 427 00:24:50,680 --> 00:24:53,320 Speaker 3: can see each person in the family for a dollar 428 00:24:53,359 --> 00:24:55,520 Speaker 3: or to a meal for something you're going to be 429 00:24:56,160 --> 00:24:59,400 Speaker 3: paying half one hundred to sixty five dollars a meal 430 00:24:59,480 --> 00:25:02,320 Speaker 3: for a family five going through the fast food window. 431 00:25:02,720 --> 00:25:06,520 Speaker 3: So I think to the key reference points you've made 432 00:25:06,960 --> 00:25:11,879 Speaker 3: back to school or BTS and sports, and the first 433 00:25:12,280 --> 00:25:16,200 Speaker 3: major transformational shift from food away from home to food 434 00:25:16,240 --> 00:25:19,920 Speaker 3: at home for the first time in nearly forty years. 435 00:25:19,760 --> 00:25:23,600 Speaker 1: Speaks to the challenges to come for the consumer. As 436 00:25:23,600 --> 00:25:25,920 Speaker 1: you've been seeing just in the data this week. Thank 437 00:25:25,960 --> 00:25:28,960 Speaker 1: you Bert, thank you Poonham for all of this. That's 438 00:25:29,000 --> 00:25:33,840 Speaker 1: Bert Flickinger, Strategic Resource Group and Punham Goyle, senior US 439 00:25:33,920 --> 00:25:37,439 Speaker 1: retail analyst for Bloomberg Intelligence. Now, next we're going to 440 00:25:37,440 --> 00:25:40,720 Speaker 1: get you caught up on the government's latest anti trust cases. 441 00:25:40,760 --> 00:25:44,000 Speaker 1: We're going to speak with Jennifer Ree of Bloomberg Intelligence 442 00:25:44,320 --> 00:25:48,400 Speaker 1: as a special Juneteenth edition of Bloomberg Daybreak continues. It's 443 00:25:48,440 --> 00:25:51,320 Speaker 1: thirty seven minutes past the hour. I'm Nathan Hager, and 444 00:25:51,400 --> 00:25:58,000 Speaker 1: this is Bloomberg. Thanks again for joining us on the 445 00:25:58,040 --> 00:26:01,320 Speaker 1: special edition of Bloomberg Daybreak. West markets are closed for 446 00:26:01,359 --> 00:26:05,200 Speaker 1: the Juneteenth holiday. I'm Nathan Hager. Big Tech has been 447 00:26:05,200 --> 00:26:08,840 Speaker 1: in the crosshairs of US anti trust along with some 448 00:26:08,880 --> 00:26:11,600 Speaker 1: other major sectors. So let's get an update on where 449 00:26:11,640 --> 00:26:14,159 Speaker 1: some of these cases stand. There are quite a few 450 00:26:14,160 --> 00:26:17,440 Speaker 1: to get through. Let's bring in Jennifer Ree, senior litigation 451 00:26:17,520 --> 00:26:22,000 Speaker 1: analyst for Antitrust with Bloomberg Intelligence. Really appreciate the time 452 00:26:22,080 --> 00:26:25,960 Speaker 1: considering how heavy the caseload has become in your world. Jen, 453 00:26:26,080 --> 00:26:29,840 Speaker 1: Thank you for this, especially when it comes to Google. 454 00:26:30,760 --> 00:26:34,680 Speaker 1: Amazon's search giant is facing scrutiny on a number of fronts, 455 00:26:34,760 --> 00:26:35,040 Speaker 1: isn't it? 456 00:26:35,640 --> 00:26:38,840 Speaker 5: Oh so many? That company has a lot of trials 457 00:26:38,880 --> 00:26:42,240 Speaker 5: coming up, because I really don't expect settlements in any 458 00:26:42,280 --> 00:26:45,720 Speaker 5: of them. They're a waiting a verdict in one and 459 00:26:45,800 --> 00:26:48,320 Speaker 5: have several coming up, one in September and then one 460 00:26:48,320 --> 00:26:48,919 Speaker 5: in the spring. 461 00:26:50,240 --> 00:26:52,159 Speaker 1: Yeah, so let's start with the one that's coming up. 462 00:26:52,280 --> 00:26:55,800 Speaker 1: This is having to do with the search business, right, Well. 463 00:26:55,640 --> 00:26:57,960 Speaker 5: The decision that's going to come out anytime now, I 464 00:26:57,960 --> 00:27:00,239 Speaker 5: think has to do with the search business, right That 465 00:27:00,320 --> 00:27:02,879 Speaker 5: trial ended at the end of last year and then 466 00:27:02,960 --> 00:27:06,720 Speaker 5: closing arguments were in early May, and I believe it 467 00:27:06,720 --> 00:27:08,720 Speaker 5: could come out at any time, although my gut tells 468 00:27:08,760 --> 00:27:10,840 Speaker 5: me that Judge is going to be very careful about this, 469 00:27:10,880 --> 00:27:13,680 Speaker 5: and it's probably still a couple months before he decides 470 00:27:13,720 --> 00:27:17,080 Speaker 5: and issues a decision just on liability, by the way, 471 00:27:17,160 --> 00:27:20,000 Speaker 5: not on remedy. So if he decides for the DOJ 472 00:27:20,200 --> 00:27:22,600 Speaker 5: in that case, at that point, after that there will 473 00:27:22,600 --> 00:27:26,640 Speaker 5: be a hearing on remedy and what the proper injunction 474 00:27:26,720 --> 00:27:29,719 Speaker 5: would be for Google on this one. I think this 475 00:27:29,760 --> 00:27:31,919 Speaker 5: is on Google Search right, just to be clear, and 476 00:27:31,960 --> 00:27:35,040 Speaker 5: it's about whether or not it's default its agreements to 477 00:27:35,080 --> 00:27:37,200 Speaker 5: be the default search engine in a lot of different 478 00:27:37,240 --> 00:27:40,280 Speaker 5: places where people have to access the Internet and don't 479 00:27:40,280 --> 00:27:42,480 Speaker 5: even really know they're using a search engine like set 480 00:27:42,520 --> 00:27:46,560 Speaker 5: behind Safari in the Apple devices. Whether or not, those 481 00:27:46,680 --> 00:27:50,679 Speaker 5: four closed other competitors and really led to maintaining the 482 00:27:50,720 --> 00:27:53,320 Speaker 5: dominance that Google Search has obtained over the years. 483 00:27:53,960 --> 00:27:58,399 Speaker 1: So what could a potential ruling mean in terms of damages, 484 00:27:58,440 --> 00:28:01,560 Speaker 1: in terms of the kinds of changes Google might potentially 485 00:28:01,640 --> 00:28:04,800 Speaker 1: need to make to satisfy the Justice Department? 486 00:28:05,000 --> 00:28:08,000 Speaker 5: You know, that is a really big question, and so 487 00:28:08,119 --> 00:28:10,560 Speaker 5: many have said the DFJ didn't really think through what 488 00:28:10,600 --> 00:28:13,240 Speaker 5: the proper injunction would be if they did win. There 489 00:28:13,280 --> 00:28:16,280 Speaker 5: are no damages at play here. This is not about money. 490 00:28:16,280 --> 00:28:19,080 Speaker 5: This is about changing the conduct of the company. And 491 00:28:19,119 --> 00:28:21,400 Speaker 5: I think there are a few options, and the judge 492 00:28:21,440 --> 00:28:24,000 Speaker 5: might actually impose several of them rather than just one. 493 00:28:24,320 --> 00:28:26,800 Speaker 5: But I think the most obvious one would be to 494 00:28:26,840 --> 00:28:30,719 Speaker 5: prohibit them from entering into these default search agreements. I mean, 495 00:28:30,720 --> 00:28:34,080 Speaker 5: they're paying something like twenty five or twenty six billion 496 00:28:34,160 --> 00:28:37,880 Speaker 5: dollars a year to various companies to have that default position. 497 00:28:38,160 --> 00:28:40,560 Speaker 5: I think twenty or twenty two something like that alone, 498 00:28:40,680 --> 00:28:42,959 Speaker 5: just to Apple and the judge could say you simply 499 00:28:43,000 --> 00:28:46,400 Speaker 5: can't do that anymore. But the weird thing about that, Nathan, 500 00:28:46,480 --> 00:28:48,840 Speaker 5: is that who does that really hurt? It hurts companies 501 00:28:48,880 --> 00:28:51,880 Speaker 5: like Apple and Mozilla because the chances are still great 502 00:28:51,920 --> 00:28:54,240 Speaker 5: that they set Google searches the default. They think it's 503 00:28:54,280 --> 00:28:57,160 Speaker 5: the better option for their users, but now Google doesn't 504 00:28:57,200 --> 00:29:00,320 Speaker 5: have to pay them. Another option would be something like 505 00:29:00,520 --> 00:29:02,480 Speaker 5: what's happening in Europe, where there have to be at 506 00:29:02,560 --> 00:29:05,240 Speaker 5: least in Android devices and in Chrome these are the 507 00:29:05,280 --> 00:29:07,920 Speaker 5: properties owned by Google. There would be a choice screen. 508 00:29:08,240 --> 00:29:10,280 Speaker 5: So if somebody buys a new Android phone and they're 509 00:29:10,320 --> 00:29:12,600 Speaker 5: setting it up, they'd be given a choice as to 510 00:29:12,680 --> 00:29:15,680 Speaker 5: what search browser they want a search engine I'm sorry 511 00:29:15,800 --> 00:29:18,560 Speaker 5: to be as their default. That's another option. The judge 512 00:29:18,600 --> 00:29:20,840 Speaker 5: can't force Apple to do that, but can have Google 513 00:29:20,880 --> 00:29:23,400 Speaker 5: do that in the Google owned properties. And I think 514 00:29:23,640 --> 00:29:26,120 Speaker 5: one other option would be forcing Google to share some 515 00:29:26,240 --> 00:29:29,520 Speaker 5: of the data and maybe even algorithms that it uses 516 00:29:30,080 --> 00:29:32,360 Speaker 5: for all the searches that have been done over the years, 517 00:29:32,400 --> 00:29:35,240 Speaker 5: because there was a lot of evidence in trial that 518 00:29:35,360 --> 00:29:39,320 Speaker 5: every single search that's done allows that search engine to improve, 519 00:29:39,720 --> 00:29:42,640 Speaker 5: and the more searches you have, the better the search engine. Becomes. 520 00:29:42,680 --> 00:29:44,720 Speaker 5: And part of the reason that some of the rivals 521 00:29:45,000 --> 00:29:47,880 Speaker 5: haven't really been able to become as good as Google 522 00:29:47,880 --> 00:29:50,360 Speaker 5: Search is because they just simply haven't had that scale. 523 00:29:50,520 --> 00:29:53,240 Speaker 1: I mean, if we saw some kind of remedy like that, 524 00:29:53,360 --> 00:29:56,440 Speaker 1: I mean, that could be a major change, a major 525 00:29:56,520 --> 00:30:00,200 Speaker 1: issue for Google. I mean, that kind of data is 526 00:30:00,200 --> 00:30:03,800 Speaker 1: something that big tech companies really hold close, is it? 527 00:30:03,960 --> 00:30:04,160 Speaker 2: You know? 528 00:30:04,280 --> 00:30:07,560 Speaker 5: Absolutely? But I will say Google's argument was, look, we're 529 00:30:07,640 --> 00:30:10,000 Speaker 5: just better. We've put a lot of money into improving 530 00:30:10,040 --> 00:30:12,200 Speaker 5: this search engine. We have the best people, the best 531 00:30:12,280 --> 00:30:14,360 Speaker 5: R and D, We've spent a lot of time on it, 532 00:30:14,400 --> 00:30:17,520 Speaker 5: and we're really good. And if that's true, if that's 533 00:30:17,560 --> 00:30:19,720 Speaker 5: their argument, well then the companies will have to prove 534 00:30:19,800 --> 00:30:21,800 Speaker 5: they can do that too, once they have the data. 535 00:30:22,040 --> 00:30:23,680 Speaker 5: And that's not necessarily a given. 536 00:30:24,440 --> 00:30:24,680 Speaker 4: Now. 537 00:30:24,840 --> 00:30:28,880 Speaker 1: In terms of the other cases that the Google is 538 00:30:28,920 --> 00:30:32,160 Speaker 1: waiting for, we're also looking for some remedies in the 539 00:30:32,200 --> 00:30:35,600 Speaker 1: Epic Games lawsuit against the Google App Store, how are 540 00:30:35,600 --> 00:30:36,840 Speaker 1: we expecting that to go down? 541 00:30:37,280 --> 00:30:39,480 Speaker 5: Well, you know, I would say that the first hearing 542 00:30:39,520 --> 00:30:42,600 Speaker 5: on that surprised me a little bit because the judge 543 00:30:42,640 --> 00:30:46,520 Speaker 5: is really really intent on a remedy that covers every 544 00:30:46,520 --> 00:30:50,200 Speaker 5: single thing that the jury found the Google had done unlawfully. 545 00:30:50,560 --> 00:30:52,520 Speaker 5: So this is there was a verdict already and a 546 00:30:52,600 --> 00:30:56,000 Speaker 5: jury found that Google was unlawfully maintaining a monopoly both 547 00:30:56,320 --> 00:30:59,240 Speaker 5: for the distribution of apps on Android devices but also 548 00:30:59,280 --> 00:31:01,600 Speaker 5: for the payment of apps or the in app payments 549 00:31:01,920 --> 00:31:05,000 Speaker 5: within the Playstore. So the judge talked about what we 550 00:31:05,040 --> 00:31:07,440 Speaker 5: would expect. He said, Google's going to have to let 551 00:31:07,520 --> 00:31:11,480 Speaker 5: other companies distribute apps on Android devices, so in other words, 552 00:31:11,520 --> 00:31:13,760 Speaker 5: there'd be other app stores on the device outside of 553 00:31:13,760 --> 00:31:17,720 Speaker 5: the Playstore, and also let other payment services companies exist 554 00:31:17,760 --> 00:31:20,400 Speaker 5: on the Playstore and in these other apps, so that 555 00:31:20,480 --> 00:31:23,400 Speaker 5: the developers could process the payments through those companies and 556 00:31:23,440 --> 00:31:26,120 Speaker 5: not through Google. The thing the judge did that was 557 00:31:26,480 --> 00:31:28,600 Speaker 5: surprised me a little bit is he said, look, these 558 00:31:28,600 --> 00:31:30,800 Speaker 5: companies need a bit of a leg up because Google 559 00:31:30,800 --> 00:31:33,400 Speaker 5: has suppressed them for so long. They need to get 560 00:31:33,440 --> 00:31:36,320 Speaker 5: at foothold and get some developers that are willing to 561 00:31:36,360 --> 00:31:39,440 Speaker 5: develop apps just for their store. So Google, maybe what 562 00:31:39,520 --> 00:31:42,520 Speaker 5: you're going to have to do is provide your entire catalog, 563 00:31:42,960 --> 00:31:46,040 Speaker 5: your entire Playstore catalog to these other distributors for some 564 00:31:46,160 --> 00:31:49,200 Speaker 5: matter of years, maybe two, and allow them to sell 565 00:31:49,240 --> 00:31:51,760 Speaker 5: your apps. Now Google would take the profit from that, 566 00:31:51,800 --> 00:31:54,120 Speaker 5: would get the revenue from those sales, But what it 567 00:31:54,160 --> 00:31:56,920 Speaker 5: would do was it would get a foothold in there 568 00:31:56,960 --> 00:31:58,840 Speaker 5: for these other app stores, so they could get to 569 00:31:58,880 --> 00:32:02,880 Speaker 5: know developers. They could get some customers and start to 570 00:32:02,920 --> 00:32:04,880 Speaker 5: develop their own apps and make money that way. 571 00:32:05,240 --> 00:32:05,520 Speaker 2: Wow. 572 00:32:06,000 --> 00:32:08,320 Speaker 1: Really fascinating to think about some of the sea changes 573 00:32:08,360 --> 00:32:10,880 Speaker 1: that could keep coming in the tech sector. We're speaking 574 00:32:10,920 --> 00:32:15,520 Speaker 1: with Jennifer Ree, the senior litigation analyst for Antitrust with 575 00:32:15,680 --> 00:32:19,920 Speaker 1: Bloomberg Intelligence. Now, outside of big tech, there's a lot 576 00:32:19,960 --> 00:32:22,640 Speaker 1: to talk about. We just had this major case filed 577 00:32:23,360 --> 00:32:26,680 Speaker 1: over the Live Nation Ticketmaster tie up. I know this 578 00:32:26,720 --> 00:32:29,120 Speaker 1: is early days, but what's the thinking about where this 579 00:32:29,200 --> 00:32:29,800 Speaker 1: could go down? 580 00:32:30,400 --> 00:32:32,560 Speaker 5: You know, it's an interesting case because I think they're 581 00:32:32,720 --> 00:32:35,640 Speaker 5: really after reading the complaint, which is all we have, 582 00:32:36,080 --> 00:32:39,000 Speaker 5: and it was not an unexpected complaint. I think people 583 00:32:39,360 --> 00:32:41,600 Speaker 5: really differ on how what they think about the strength 584 00:32:41,600 --> 00:32:43,440 Speaker 5: of the complaint. I happen to think it's a pretty 585 00:32:43,480 --> 00:32:45,640 Speaker 5: good one. They are aspects of the complaint that are 586 00:32:45,680 --> 00:32:48,400 Speaker 5: weaker in aspects that are stronger, but I tend to 587 00:32:48,400 --> 00:32:52,200 Speaker 5: think it's a pretty good one, particularly where they allege 588 00:32:52,240 --> 00:32:55,960 Speaker 5: that the companies engaged in unlawful exclusive dealing. In the 589 00:32:56,000 --> 00:32:58,800 Speaker 5: antitrust world, if a company that has a monopoly in 590 00:32:58,840 --> 00:33:03,080 Speaker 5: a market tied up with exclusive deals, long term exclusive deals, 591 00:33:03,080 --> 00:33:06,360 Speaker 5: I should say, more than about forty or fifty percent 592 00:33:06,400 --> 00:33:09,440 Speaker 5: of the outlets for whatever that product is, which it's 593 00:33:09,760 --> 00:33:12,160 Speaker 5: apparently according to what the DOJ says, the facts are 594 00:33:12,200 --> 00:33:15,560 Speaker 5: at this company is done. That means it forecloses its rivals. 595 00:33:15,560 --> 00:33:18,040 Speaker 5: Its rivals can't get in there and enter those contracts. 596 00:33:18,240 --> 00:33:22,120 Speaker 5: What I'm talking about is Ticketmaster and the agreements that 597 00:33:22,160 --> 00:33:25,120 Speaker 5: the company enters with venues for Ticketmaster to be the 598 00:33:25,160 --> 00:33:27,840 Speaker 5: exclusive ticketing agent for anything that takes place at that 599 00:33:27,960 --> 00:33:30,960 Speaker 5: venue for like ten years or fourteen years, it means 600 00:33:31,000 --> 00:33:33,240 Speaker 5: seat Geek or some other company can't come in there 601 00:33:33,280 --> 00:33:38,000 Speaker 5: and sell tickets. And it's pretty straightforward in antitrust law, 602 00:33:38,160 --> 00:33:41,240 Speaker 5: that kind of an agreement can violate the law. I mean, 603 00:33:41,280 --> 00:33:43,640 Speaker 5: all of the facts are taken into accounts, so you 604 00:33:43,680 --> 00:33:46,120 Speaker 5: have to look at whether it's terminable, whether it's terminable 605 00:33:46,160 --> 00:33:49,200 Speaker 5: by will, as I said, the term of the agreement, 606 00:33:49,240 --> 00:33:51,960 Speaker 5: and many other issues related to that agreement, but just 607 00:33:52,040 --> 00:33:55,040 Speaker 5: on its face, if the facts are as the DOJ says, 608 00:33:55,160 --> 00:33:57,640 Speaker 5: it looks like there's a possibility they could at least 609 00:33:57,640 --> 00:34:01,600 Speaker 5: get some traction on that claim. We also claim that 610 00:34:01,640 --> 00:34:04,840 Speaker 5: there's tying going on. And what tying is is Live 611 00:34:04,960 --> 00:34:07,280 Speaker 5: Nation saying to the artist it promotes, and it promotes 612 00:34:07,320 --> 00:34:10,080 Speaker 5: a lot of artists or artists that want to use 613 00:34:10,080 --> 00:34:12,240 Speaker 5: its venues, I should say, and it owns and operates 614 00:34:12,280 --> 00:34:14,880 Speaker 5: and manages a lot of venues. We have to promote 615 00:34:14,920 --> 00:34:17,239 Speaker 5: you too. You can't perform in that venue, and that 616 00:34:17,360 --> 00:34:20,840 Speaker 5: might be some big, great venue, particularly amphitheaters where the 617 00:34:20,920 --> 00:34:24,000 Speaker 5: artist wants to perform unless you also hire us for promotion. 618 00:34:24,440 --> 00:34:26,120 Speaker 5: Oh and by the way, we're going to use ticket 619 00:34:26,120 --> 00:34:30,239 Speaker 5: Master too to sell the tickets to your events. This 620 00:34:30,360 --> 00:34:32,879 Speaker 5: can also violate the antitrust laws. So I thought those 621 00:34:32,920 --> 00:34:35,719 Speaker 5: two claims were actually pretty good, and I think they 622 00:34:35,800 --> 00:34:39,280 Speaker 5: go beyond what's in the consent orders that have already 623 00:34:39,280 --> 00:34:42,040 Speaker 5: been entered by this company related to when the two 624 00:34:42,040 --> 00:34:45,759 Speaker 5: companies merged. Some people say, look, this is just about 625 00:34:45,800 --> 00:34:48,560 Speaker 5: violating that consent order. But this is beyond just violating 626 00:34:48,560 --> 00:34:49,359 Speaker 5: that consent order. 627 00:34:49,840 --> 00:34:53,919 Speaker 1: You know, it's interesting to think about why this action 628 00:34:54,120 --> 00:34:57,520 Speaker 1: was brought against Live Nation and ticket Master. Now when 629 00:34:58,040 --> 00:35:01,399 Speaker 1: you know, the merger has been fairly contra almost from 630 00:35:01,400 --> 00:35:03,600 Speaker 1: the time it was entered into more than a decade ago. 631 00:35:03,640 --> 00:35:06,479 Speaker 1: I mean, why go after them now? You know it. 632 00:35:06,400 --> 00:35:09,600 Speaker 5: Really And this is why some people think the case 633 00:35:09,640 --> 00:35:11,880 Speaker 5: is weak. They're saying, well, this is just political because 634 00:35:11,920 --> 00:35:14,080 Speaker 5: why now? But I think you have to look at 635 00:35:14,120 --> 00:35:17,399 Speaker 5: sort of the pattern of the history in twenty ten 636 00:35:17,480 --> 00:35:19,759 Speaker 5: when they first merged and the deal was cleared, but 637 00:35:19,880 --> 00:35:22,480 Speaker 5: cleared with a consent order. So a consent order is 638 00:35:22,520 --> 00:35:25,480 Speaker 5: a settlement, meaning that the DOJ found the deal to 639 00:35:25,480 --> 00:35:28,239 Speaker 5: be illegal, but the company was willing to enter a 640 00:35:28,280 --> 00:35:30,640 Speaker 5: remedy that fixed at least what they thought would be 641 00:35:30,640 --> 00:35:32,919 Speaker 5: illegal about the deal. And you know what, they're looking 642 00:35:33,000 --> 00:35:35,520 Speaker 5: into a crystal ball. They're not always right. These things 643 00:35:35,560 --> 00:35:38,759 Speaker 5: don't always work, but they're trying their best, and it 644 00:35:38,800 --> 00:35:41,840 Speaker 5: didn't really work. I mean, that's what history has shown. 645 00:35:42,040 --> 00:35:44,399 Speaker 5: But they entered that consent order, so at that point 646 00:35:44,480 --> 00:35:46,719 Speaker 5: they were allowed to go forward with the deal. Now, 647 00:35:46,760 --> 00:35:49,360 Speaker 5: back in twenty nineteen, there were a lot of complaints 648 00:35:49,400 --> 00:35:53,160 Speaker 5: from industry participants that they weren't abiding by the terms 649 00:35:53,160 --> 00:35:56,120 Speaker 5: of that order. At that time, Trump's DOJ did look 650 00:35:56,160 --> 00:35:59,000 Speaker 5: at it open an investigation, I think just as to 651 00:35:59,040 --> 00:36:02,239 Speaker 5: whether they're violating order, and found that they were. And 652 00:36:02,280 --> 00:36:05,799 Speaker 5: what Ticketmaster said was, look, the terms are vague and ambiguous, 653 00:36:05,840 --> 00:36:09,160 Speaker 5: we're not really violating it. But if you read the 654 00:36:09,239 --> 00:36:11,719 Speaker 5: terms the way we are, but you need to clarify 655 00:36:11,760 --> 00:36:14,120 Speaker 5: the terms. So the dj did that. They were much 656 00:36:14,160 --> 00:36:16,400 Speaker 5: more explicit about the terms. They laid out that the 657 00:36:16,440 --> 00:36:20,480 Speaker 5: companies cannot retaliate against venues that don't use Ticketmaster and 658 00:36:20,560 --> 00:36:24,360 Speaker 5: use arrival, cannot retaliate against artists or you know, anybody 659 00:36:24,360 --> 00:36:27,000 Speaker 5: for not using any part of the supply chain for 660 00:36:27,080 --> 00:36:30,640 Speaker 5: not using Ticketmaster, and they extended it by about five years. 661 00:36:31,280 --> 00:36:33,520 Speaker 5: So I think we have a couple things happening. First, 662 00:36:33,520 --> 00:36:36,680 Speaker 5: we're getting complaints that they're violating that order again now, 663 00:36:37,680 --> 00:36:40,719 Speaker 5: and then you also had that the tailor Taylor Swift 664 00:36:40,760 --> 00:36:43,880 Speaker 5: fiasco that everybody knows about now. I should say that 665 00:36:43,920 --> 00:36:47,680 Speaker 5: the investigation of the company was already ongoing before that happened. 666 00:36:48,160 --> 00:36:51,640 Speaker 5: But what that did is provide an example of why 667 00:36:51,719 --> 00:36:54,319 Speaker 5: more competition is needed in my mind and in the 668 00:36:54,320 --> 00:36:57,759 Speaker 5: mind of many people, because it shows that without competition, 669 00:36:57,800 --> 00:36:59,600 Speaker 5: the company doesn't really have to put a lot of 670 00:36:59,640 --> 00:37:01,600 Speaker 5: money in R and D and innovation into their it, 671 00:37:02,480 --> 00:37:04,960 Speaker 5: and maybe that's part of the reason for the failure. 672 00:37:05,120 --> 00:37:07,439 Speaker 5: Certainly the high demand might have been part of it too, 673 00:37:07,680 --> 00:37:10,160 Speaker 5: but the it also possibly could have been better had 674 00:37:10,160 --> 00:37:13,200 Speaker 5: they faced more competition to be better. So I think 675 00:37:13,520 --> 00:37:15,480 Speaker 5: when you put all that together and you look at 676 00:37:15,520 --> 00:37:17,880 Speaker 5: that history and you think, well, we settled once for 677 00:37:17,960 --> 00:37:21,520 Speaker 5: violating the consent order, we can't just settle again because 678 00:37:21,560 --> 00:37:26,640 Speaker 5: we'll look foolish. Now there's public attention. It's a politically 679 00:37:27,200 --> 00:37:29,839 Speaker 5: you know, it's a politically good case to bring. There's 680 00:37:29,880 --> 00:37:32,839 Speaker 5: nobody that's going to be upset about us suing Live Nation. 681 00:37:32,960 --> 00:37:34,759 Speaker 5: No one who's ever gone to a concert and paid 682 00:37:34,800 --> 00:37:36,839 Speaker 5: for all those fees and paid for the ticket price. 683 00:37:37,239 --> 00:37:39,200 Speaker 5: So why not just go for it now? 684 00:37:39,560 --> 00:37:42,040 Speaker 1: Now, apart from the Live Nation ticket master dispute, we 685 00:37:42,040 --> 00:37:44,880 Speaker 1: do have some other anti trust cases coming up related 686 00:37:44,920 --> 00:37:48,560 Speaker 1: to mergers that are pending. We also have an election 687 00:37:48,840 --> 00:37:54,200 Speaker 1: coming up. How do you expect antitrust to potentially differ 688 00:37:54,600 --> 00:37:57,600 Speaker 1: between a Biden administration and a Trump administration in our 689 00:37:57,680 --> 00:37:58,400 Speaker 1: last minute? 690 00:37:58,520 --> 00:38:00,480 Speaker 5: You know, I think it's going to be uncertain because 691 00:38:00,520 --> 00:38:04,279 Speaker 5: first it depends on who Trump nominates for DOJ and 692 00:38:04,320 --> 00:38:06,680 Speaker 5: at FDC to be the decision makers, and you know, 693 00:38:06,719 --> 00:38:09,120 Speaker 5: it's kind of a split in the Republican Party, some 694 00:38:09,200 --> 00:38:11,200 Speaker 5: that are very business friendly and some that sort of 695 00:38:11,360 --> 00:38:13,880 Speaker 5: like what the current FDC and DJ are doing. So 696 00:38:13,920 --> 00:38:15,960 Speaker 5: it depends on that, but I also think it'll be 697 00:38:16,000 --> 00:38:17,000 Speaker 5: a little bit erratic. 698 00:38:17,760 --> 00:38:19,440 Speaker 1: Thank you for this, Jen, really great to have you 699 00:38:19,480 --> 00:38:19,960 Speaker 1: on with us. 700 00:38:20,480 --> 00:38:20,880 Speaker 5: Thank you. 701 00:38:21,280 --> 00:38:25,440 Speaker 1: That's Jennifer Ree, senior anti trust litigation analyst at Bloomberg Intelligence. 702 00:38:25,719 --> 00:38:28,400 Speaker 1: Our thanks as well to Stephen Shork of the Short Group, 703 00:38:28,480 --> 00:38:33,040 Speaker 1: Strategic Resource Groups, Bert Flickinger, and Punam Goyle of Bloomberg Intelligence. 704 00:38:33,040 --> 00:38:35,560 Speaker 1: And thanks to you as well for listening on this 705 00:38:35,719 --> 00:38:39,479 Speaker 1: Juneteenth holiday. I'm Nathan Hager. Stay with us. Today's top 706 00:38:39,520 --> 00:38:43,440 Speaker 1: stories and global business headlines are coming up right now.