Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business
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Speaker 1: and Tim Stenebek from Bloomberg Radio.
Speaker 2: I love it with Tim Stenebeck dances to Madonna.
Speaker 3: Oh my God. It is just very special.
Speaker 2: Because we're live at the US Open again. It's something
Speaker 2: we look forward.
Speaker 4: To everything, the best two days of well, can I
Speaker 4: say that I don't want to, like, you know, I
Speaker 4: don't want to make the other days feel bad, but sorry,
Speaker 4: it's out there already. Yeah, it's pretty fun being here
Speaker 4: at the US opener in the shadow of Arthur Ash
Speaker 4: Stadium at the twenty twenty four US Open. There are
Speaker 4: a lot of people here this year, Carol. The US
Speaker 4: Open on Monday, Opening Day. Yes, the biggest single day
Speaker 4: crowd in the history of the US Open. Seventy four thousand,
Speaker 4: six hundred and forty one people.
Speaker 5: We're here.
Speaker 2: I feel like every year that we come here, we
Speaker 2: hear like other records being broken.
Speaker 3: We can tell you from experience.
Speaker 2: A ticket resale market also hot. The cheapest ticket you
Speaker 2: did some homework on this, so I had to pay
Speaker 2: for you said right, was more than three hundred dollars
Speaker 2: for a day session.
Speaker 4: Three hundred and eight dollars for Arthur ash tomorrow noon
Speaker 4: noon slot. My life has come in. I got the
Speaker 4: media pass. We're good.
Speaker 2: Let's get to the person who's involved in all of this.
Speaker 2: Kirsten Corio is back with us. She's USTA chief Commercial
Speaker 2: officer on site with us here at the US Open.
Speaker 3: Man, it feels like a good year already.
Speaker 6: It's a bonker's spectacular year yet again. And I will
Speaker 6: have you know that the ticket the original ticket price.
Speaker 6: I'm glad you said resaleing on individuals. The original ticket price.
Speaker 6: The lowest we had was thirty two dollars at the
Speaker 6: time original on sale, so you just have to buy earlier.
Speaker 4: Does this drive you crazy?
Speaker 6: Though?
Speaker 4: Does this drive you crazy that instead of the USTA
Speaker 4: getting the three hundred eight dollars that we spent on
Speaker 4: tomorrow's Nune session, it's ticketmaster whoever we bought it from.
Speaker 3: It doesn't drive me crazy.
Speaker 6: And you know what, it's most likely from a US
Speaker 6: Open subscriber who buys all Arthur Ash sessions who couldn't
Speaker 6: make it for the day session. Really, I mean even
Speaker 6: the most uber fan doesn't make it out for every
Speaker 6: single one of the twenty five Arthur Ash sessions.
Speaker 3: So it's probably one.
Speaker 6: Of them, and I don't begrudge them their ability to
Speaker 6: resell their ticket.
Speaker 2: How much of the tickets are sold ahead of time?
Speaker 2: I remembered you saying something I thought last year. A
Speaker 2: lot of stuff gets sold.
Speaker 6: Out, right, Yeah, So we had just unprecedented demand all year.
Speaker 6: When we first went on sale the original American Express
Speaker 6: Early Early Access for the pre sale, we sold as
Speaker 6: many tickets in the first hour as we did in
Speaker 6: five days last year. So it's just double digit percentages up.
Speaker 6: The on sale a week later, double digit percentages up.
Speaker 6: The demand is nuts.
Speaker 4: There was this big concern two years ago that with
Speaker 4: Serena Williams no longer playing, that you wouldn't see a
Speaker 4: huge demand here in the US. That obviously wasn't the case.
Speaker 4: We talked to you about that last year. How do
Speaker 4: you explain the growth from last year to this year?
Speaker 6: Though I think there are nearly a million people nine
Speaker 6: hundred and fifty seven thousand to be exact who enjoyed
Speaker 6: the twenty twenty three US Open, who said, Man, I'm
Speaker 6: definitely coming back in twenty twenty four, and I'm going
Speaker 6: to take some more friends with me, and I'm going
Speaker 6: to tell all my friends.
Speaker 3: That's the simplest answer I can give you.
Speaker 6: But you know, beyond just the success of this event,
Speaker 6: it feels like for the past few years, tennis has
Speaker 6: been having a moment. More people in the US are
Speaker 6: playing tennis, thans and for me about tennis and as challengers.
Speaker 6: The movies and Daya represent representing the sport beautifully, and
Speaker 6: I just have to, you know, credit the growth of
Speaker 6: tennis participation as an element in the desire for people
Speaker 6: to come out and see the top pros in the world.
Speaker 2: Kirsten, how many people are returnees?
Speaker 7: Like?
Speaker 3: How much?
Speaker 2: What percentage of folks are just coming to the Open
Speaker 2: year after year after year?
Speaker 6: Oh yeah, more than fifty percent of our ur Thrash
Speaker 6: tickets are sold to full series ticket subscribers who do
Speaker 6: purchase all twenty five sessions You're in, You're Out, and
Speaker 6: those were new at ninety eight ninety nine percent.
Speaker 2: Which is amazing. And what about the age demographics? I
Speaker 2: think We've talked with you about this, and I think
Speaker 2: I feel like golf went through it. Maybe I don't
Speaker 2: know if tennis ever went through a little bit of
Speaker 2: a lull of people were worried.
Speaker 3: I don't know that that was the case.
Speaker 2: But I mean, is it continuing to attract a younger
Speaker 2: generation as well?
Speaker 3: Well? I think the short answer is yes.
Speaker 6: But Fan Week is which is now part of the
Speaker 6: three week and one day US Open. The main draw
Speaker 6: runs for two weeks, the qualifying tournament runs the week
Speaker 6: prior that. We've called fan Week, and we've built in
Speaker 6: all kinds of ten poll events to attract a more
Speaker 6: diverse younger audience, younger families to that. And we had
Speaker 6: a record two hundred and sixteen thousand people come through
Speaker 6: that week, that Fan Week, And so that's really the
Speaker 6: way that we can attract a younger audience, a younger demographic.
Speaker 6: We're giving away We gave away ten thousand free rackets
Speaker 6: thanks to Wilson during that week, and we have Heineken
Speaker 6: Happy Hours from five to seven every one of those.
Speaker 3: Days of block Party.
Speaker 6: So I think that's a factor too in trying to
Speaker 6: attract the younger audience to how cool it is to
Speaker 6: be out here.
Speaker 2: It works, and it translates into people coming to the
Speaker 2: open Yeah.
Speaker 4: Yeah, How much more capacity do you have when we
Speaker 4: talk about the number that came on Monday, more than
Speaker 4: seventy four thousand. Can you actually fit more people here?
Speaker 3: We can't fit more people in the stadium.
Speaker 6: The stadium's capacity Arthurrash Stadium is a fixed capacity. Louis
Speaker 6: Armstrong is a fixed capacity. But we also now are
Speaker 6: selling evening grounds passes, which is something we haven't done
Speaker 6: for a while, so we can get more people. We
Speaker 6: didn't like the concept of not allowing people to come
Speaker 6: into the grounds if there's tennis being played outside of
Speaker 6: those two stadiums, and you can go freely and watch
Speaker 6: those if you stay all day with the grounds pass,
Speaker 6: But if you only want to come for the evening
Speaker 6: and watch those matches, will sell you a grounds evening.
Speaker 4: When are those matches taking place in the first are
Speaker 4: they in a second?
Speaker 6: Could you have in the early rounds in the first
Speaker 6: and in the first and second round? You know, every
Speaker 6: one of our courts is filled with competition, and some
Speaker 6: courts have matches that will run all the way up
Speaker 6: until midnight, depending on how long the matches are if
Speaker 6: they're quick matches, perhaps not, But you know, in our
Speaker 6: first couple nights, in our first four nights of the
Speaker 6: first two rounds, you're likely to catch some great tennis
Speaker 6: on the outer courts as well as inside the stadium.
Speaker 4: Some of the matches not so quick.
Speaker 3: Yeah. Yes, he had a record breaking.
Speaker 4: Match, Sebastian, who's on camera and actually doing everything right now.
Speaker 4: He came out here for a match. Was it Monday, Sebastian,
Speaker 4: But you got.
Speaker 2: Home and the match was still going on. Yeah, Yeah,
Speaker 2: is like an hour and a half. It was a
Speaker 2: five hour match.
Speaker 6: Five hours thirty five minutes is the longest match in
Speaker 6: the US Open history between Karen Katchanov and Daniel Evans,
Speaker 6: and just an incredible another record, another amazing, another amazing statistic.
Speaker 3: About the twenty twenty four US Open.
Speaker 2: Yes, I have to say when I walked in, I
Speaker 2: was just blown away by the crowd even looking bigger
Speaker 2: than last year. And I don't know if that's the case,
Speaker 2: but it really like amazes me and over the years
Speaker 2: of coming here, just how it continues to grow.
Speaker 6: Yeah, and so we think we're going to get a
Speaker 6: million fans through the three weeks in one day on
Speaker 6: which i'd be a record, which would be a record
Speaker 6: last year nine hundred and fifty seven thousand. This year,
Speaker 6: we're on track to meet and exceed that record. The
Speaker 6: weather's been great, yeah, and that definitely helps, definitely helps
Speaker 6: people come out and the events that we added through
Speaker 6: fan week and into the finals weekend. We've added a
Speaker 6: Finals weekend festival and watch party in Louis Armstrong Stadium,
Speaker 6: as well as a Finals weekend banfest after party Saturday
Speaker 6: night after.
Speaker 3: The War's final. You know, we'll sleep a little bit
Speaker 3: on September ninth when we.
Speaker 4: Start all over again next week. You know what I noticed.
Speaker 4: I think last year when you rolled up to be
Speaker 4: interviewed by us, you had like a big energy drink
Speaker 4: with you. I don't see the energy drink right now,
Speaker 4: So I think that's a good sign as to where
Speaker 4: we are in the tournament. Like you're feeling good.
Speaker 3: We're feeling great.
Speaker 6: Yeah, next week we might need a little bit more
Speaker 6: of the adrenaline and the energy drink, but we're feeling great.
Speaker 3: We're just energized and axhilerated to see it all.
Speaker 4: You mentioned you mentioned the weather, which I know yesterday
Speaker 4: was a really, really hot day. Do you see a
Speaker 4: decline in the number of fans who come out when
Speaker 4: a day's so hot, I mean so hot that some
Speaker 4: of the tennis players complain about it.
Speaker 3: Yeah, I think that's a factor, you know.
Speaker 6: I think there are certain people, especially those that have
Speaker 6: had the privilege of being out to sessions before either
Speaker 6: this year or other years, who may make a judgment
Speaker 6: call of if they don't feel that they can handle
Speaker 6: being a ninety plus degree heat.
Speaker 3: I think that's a factor.
Speaker 6: But we also did have we may have broken another
Speaker 6: record yesterday in attendance.
Speaker 3: It's even though it was so unbearable.
Speaker 5: Yeah.
Speaker 3: Hot, that's pretty amazing.
Speaker 5: That is amazing.
Speaker 2: I've to tell you, I have a friend here, a
Speaker 2: young couple and they have their seven month old here too,
Speaker 2: So wow, we're creating younger fan base and they're from
Speaker 2: out of town and come in for this event. So
Speaker 2: how do you think about year after year, like how
Speaker 2: you like you continue some of the things that are working,
Speaker 2: How you think about new ways right because you think
Speaker 2: about revenue streams and how do you continue to build
Speaker 2: out the business, so on the business side and keeping
Speaker 2: a balance of keeping the sport pure that people don't
Speaker 2: walk through and feel like it's too commercial.
Speaker 6: That's why fan Week, and I'm sorry, I'm gonna keep
Speaker 6: harping on it like that is such an important investment
Speaker 6: for us. And it is free for all fans to
Speaker 6: attend every one of those days, seven days to come in,
Speaker 6: free to go into Arthur ash Stadium and watch the
Speaker 6: top pros practicing. You can sit in the front row.
Speaker 6: A few days ago, I walked in before the main
Speaker 6: draw and saw Coco playing a practice match against Sabalanca,
Speaker 6: which is like amazing after Arthur ash Stadium competitively, but
Speaker 6: it's a practice match, And I'm looking at the fans
Speaker 6: sitting around that court who got in for free, and
Speaker 6: I'm thinking they're seeing a reprise of the women's final
Speaker 6: last year for free.
Speaker 3: Like, so that's really important. Yeah.
Speaker 6: Now, business is of course very important too, and we
Speaker 6: do know that fifty percent ish of people who attend
Speaker 6: fan Week do ultimately buy tickets for the main draw,
Speaker 6: So it is a pipeline to build future fans. Adding
Speaker 6: tent pole events during that main draw, sorry, during that
Speaker 6: fan Week that our ticketed events is helping grow the
Speaker 6: business as well and provide more exposure for our players,
Speaker 6: and so when we think about ticket sales and hospitality
Speaker 6: and premium, which are primary revenue streams, that's sort of
Speaker 6: how we begin to introduce some test new ticketed products.
Speaker 6: On the premium and experience side, we've been adding new
Speaker 6: products to meet some of that experiential demand. This year,
Speaker 6: we have a finals weekend clinic. A very limited number
Speaker 6: of clients will have the privilege of doing that, playing
Speaker 6: on a court with Andrea Agassi and Andy Rotick before
Speaker 6: the men's final, before the women's final, and sitting in
Speaker 6: the court side premiere first few rows ticketed product, and
Speaker 6: so hospitality and experiences are a big part of that too.
Speaker 2: How limited, So that's a limited I think are trying
Speaker 2: to twenty four.
Speaker 3: Twenty four for each session.
Speaker 4: Yeah, wow, that's amazing.
Speaker 6: That's a pretty cool thing. And the women sold out first,
Speaker 6: which we also love that. Who are they working within
Speaker 6: the women same thing, same same but the draw being
Speaker 6: the women's final.
Speaker 3: Love that.
Speaker 4: How are things looking on the sponsorship side in terms
Speaker 4: of demand, what you're hearing from companies, the appetite for
Speaker 4: them to come back and extend their agreements and partnerships
Speaker 4: with you guys.
Speaker 6: They've been great we've got, you know, a small ish
Speaker 6: roster of partners, twenty four official sponsors, seven of which
Speaker 6: have been with us for more than thirty years.
Speaker 3: So there's a really strong renewal history and track record here.
Speaker 6: And you see our partners on the grounds, activating everywhere
Speaker 6: and entertaining their own clients, but also interacting with fans
Speaker 6: and enhancing the experience for fans. The MX Fan Experience
Speaker 6: was opened during fan Week as well, and.
Speaker 3: We added two new partners this year.
Speaker 6: We added Destination DC for Washington DC tourism and n
Speaker 6: we added Moet as our official champagne partner, which has
Speaker 6: come in handy.
Speaker 4: Are you able to reliably raise prices each year for
Speaker 4: those brand opportunities to keep the revenue growing at the
Speaker 4: USTA From that side.
Speaker 6: As long as we can demonstrate more value to the partner,
Speaker 6: you know, the market, the value of the partnership can increase,
Speaker 6: but it's all dependent on what value does the partner
Speaker 6: wish to extract from the US Open and how can
Speaker 6: we quantify and qualify, you know, the value that we've
Speaker 6: been able to deliver to that.
Speaker 3: Partner over their term.
Speaker 2: What's fun about the sports world for you because you
Speaker 2: spent what fourteen years of the NBA. I know we
Speaker 2: always bring this up, but I think here you're doing,
Speaker 2: you know, tennis.
Speaker 3: There's so much going on.
Speaker 2: We've had a week where the NFL said okay for
Speaker 2: private equity.
Speaker 3: To buy into you know firms.
Speaker 2: We have been doing a lot of stuff a business
Speaker 2: week about the explosion of gambling basically right when it
Speaker 2: comes to all things sports. But what's interesting for you
Speaker 2: to kind of watch this progression and where things are.
Speaker 3: Sports is just fun sports and live entertainment.
Speaker 6: To me, it's great predict everything and that's what makes
Speaker 6: it really serendipitous and fun, but also sometimes stressful.
Speaker 3: Sometimes the energydrink. Energy drink is required.
Speaker 6: But we also we just announced yesterday with our partners ESPN. Yeah,
Speaker 6: we've extended our relationship through twenty thirty seven.
Speaker 3: It will be the longest deal in.
Speaker 6: Tennis and they're a fantastic partner and we couldn't be
Speaker 6: more thrilled about that.
Speaker 3: So that's the big fun news from yesterday.
Speaker 6: That did require a little help from our partner Moet
Speaker 6: in celebrating that one, But that makes it really.
Speaker 3: Full the bottles, like a couple of courts.
Speaker 4: Maybe maybe, maybe when we speak to you next year,
Speaker 4: what's going to be the biggest.
Speaker 6: Change wow for the twenty twenty five US said, yeah.
Speaker 4: We're already thinking about it.
Speaker 6: Yeah, we're about you are you will be in a week?
Speaker 6: We sure are, I mean a couple of weeks. It's interesting,
Speaker 6: like day one begins and we already have a twenty
Speaker 6: twenty five list beginning of Okay, we're going to do
Speaker 6: this differently for next year. But you know, I'll say,
Speaker 6: when we look at the Fan Week and the tent
Speaker 6: pole events, we love them. We want to make them bigger, better,
Speaker 6: you know, more exciting performances, and they really are a
Speaker 6: testing ground for us. You can't predict the competition on
Speaker 6: the court and the main draw, but you can plan
Speaker 6: for and create new experiences for the fans that come out,
Speaker 6: and new ways to deliver that to people digitally. And
Speaker 6: when we think about digital you may not see it
Speaker 6: here on the grounds. If you wanted to take a
Speaker 6: walk over to the Advantage Arena, you could play Fortnite,
Speaker 6: you could play US Open Night.
Speaker 3: Five million people have played it so far.
Speaker 4: Always good to see you, Officer of the USDA, Kirston
Speaker 4: Correo joining us here at the US Open.
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Speaker 3: Yes, you're at the US Open and just loving it.
Speaker 3: Just perfect weather.
Speaker 2: I gotta say there are a few certain truths when
Speaker 2: it comes to the US Open. There's the honeydews. Okay, yeah,
Speaker 2: check matches that stretch into the middle of the night.
Speaker 3: I think you've run for a long time.
Speaker 4: It players not so much, not so.
Speaker 2: Much a definite New York five even though it's global.
Speaker 5: But crowd.
Speaker 4: We can hear them right now.
Speaker 2: Right like we love it when like somebody scores a
Speaker 2: great point or something.
Speaker 3: If you just hear the crowd.
Speaker 4: Sponsors logos they're plastered everywhere. They've been for years, like
Speaker 4: you know, JP, Morgan, Chase, Emirates, Chubb, IBM, and of
Speaker 4: course American.
Speaker 2: Express, longtime partner of the US Open. MX has been
Speaker 2: a brand sponsor of the US Open for more than
Speaker 2: thirty years. We just talked with Kirsten about some of
Speaker 2: the brands. A handful or so that have been with
Speaker 2: them for a long time, and that includes American Express.
Speaker 4: Yeahs Zuki can tell us exactly why and where they
Speaker 4: see the value. She's vice president of Global Brand, Sponsorships
Speaker 4: and Experiential Marketing at American Express. She joined us on
Speaker 4: site here at the US Open.
Speaker 8: Good hello to see you too, Thanks for having me
Speaker 8: another year.
Speaker 4: It's another partnership year between AMEX and the US Open.
Speaker 8: I know this is our thirty first year, if you
Speaker 8: can believe it.
Speaker 4: Well, what keeps you coming back? I mean this is
Speaker 4: a big ticket event. This is a big ticket item.
Speaker 4: You have to see ROI from as you sit, Yes,
Speaker 4: what keeps you coming back?
Speaker 8: I mean ultimately, right, we are not just in the
Speaker 8: card business. We are really in the business of membership.
Speaker 8: And when we talk about membership, it's about all the
Speaker 8: value that we bring to our card members and our
Speaker 8: prospective card members. So that could be at things like
Speaker 8: live sports and incredible moments like here, music, entertainment and
Speaker 8: other how do we, you know, bring them that incredible
Speaker 8: access and value. Right, And so when you think about
Speaker 8: US Open, I mean, this is such an incredible event
Speaker 8: right here in New York City, and like, yeah, would
Speaker 8: not want to be anywhere else.
Speaker 2: What does it event specifically like the US Open, Yeah,
Speaker 2: do for your membership base. Yeah, it's a feedback you here,
Speaker 2: what do you see?
Speaker 3: It's number one.
Speaker 8: It's an incredible event, right, And I'm sure Curisten talked
Speaker 8: a little bit about even the growth of the fan base,
Speaker 8: right and their ticket sales, et cetera. But even just
Speaker 8: like even in tennis, fandom overall has grown actually year
Speaker 8: after year for the last few years. For US, we
Speaker 8: really think about this event. We were able to bring
Speaker 8: something for everyone because there was so much to offer here.
Speaker 8: We have a twenty thousand square foot fan experience space
Speaker 8: and so it is all indoors, especially on really hot
Speaker 8: summer and New year Gestic is like yesterday, but the
Speaker 8: first floor is actually open to everyone, and so it's
Speaker 8: a fan experience space. We've got everything from Glow Tennis.
Speaker 8: We have this really incredible customizable tennis ball station.
Speaker 3: This year.
Speaker 8: We have you know, things like we actually have a
Speaker 8: two K so like the actual video game two K
Speaker 8: two K Top Spin. We have some gaming stations there.
Speaker 8: We have this really fun trivia based more machines of
Speaker 8: vending machines like size of a human. There's some trivia
Speaker 8: in there, and depending on if you get the answers
Speaker 8: right around, there's some great prizes as well. So we've
Speaker 8: got that upstairs. We've got a card member lounge as well.
Speaker 4: So when you're a few months from now, or even
Speaker 4: just a couple of weeks from now, when you're looking
Speaker 4: at the numbers, yes, to justify the marketing spent here,
Speaker 4: what are the metrics that you're looking at to know
Speaker 4: whether or not it was successful.
Speaker 8: I mean we're looking at everything from certainly right, ticket
Speaker 8: sales and the attendance here, but we're also looking at
Speaker 8: for ourselves engagement reach things of that nature, right, like
Speaker 8: what are the numbers of people that are coming by?
Speaker 8: And you know, we'll look at that from the perspective
Speaker 8: of like our existing car member base and other opportunities there.
Speaker 8: And then certainly right there's going to be all the
Speaker 8: qualitative feedback as well in terms of like how much
Speaker 8: do they love it? Like we hear such great feedback
Speaker 8: about the things that we offer.
Speaker 4: Do you have do you want to see an increase
Speaker 4: in number of people who are signing up for certain
Speaker 4: cards after an event like this, like a Platinum cards.
Speaker 3: For example, Yeah, that would be fantastic, Right.
Speaker 4: Are you able to measure that? Like, are you able
Speaker 4: to draw a line from this to that?
Speaker 8: Yeah, there's there's different ways in which we're able to
Speaker 8: draw and like be able to talk about like ROI
Speaker 8: overall for the business certainly, Yeah, I think for us too,
Speaker 8: Right when we think about you know, the like the
Speaker 8: audience here, how this has also changed, right, it continues
Speaker 8: to get younger. We think about gen Z and millennial
Speaker 8: audiences for us, like when we think about even twenty
Speaker 8: twenty three. Overall as a business, we've actually publicly talked
Speaker 8: about the fact that like sixty percent of all new
Speaker 8: cards acquired in consumer is actually in that like gen
Speaker 8: Z millennial base, and seventy five percent of that is
Speaker 8: actually in the platinum and gold cards. So you think
Speaker 8: about premium card segments and the growth of that younger demographic, right,
Speaker 8: fans here also getting younger as well, and so it's
Speaker 8: a great, incredible opportunity for us to engage them at
Speaker 8: all different levels.
Speaker 2: Well, that's what I think we wonder, Like we always
Speaker 2: think about, you know, you do something and then what's
Speaker 2: the direct payoff? And maybe it is, And that's what
Speaker 2: I guess I'm curious about and I think tims too,
Speaker 2: is do you actually sign up people that come here
Speaker 2: to this event or is it more about like brand
Speaker 2: recognition and understanding what AMEX is about, even for like
Speaker 2: a younger consumer.
Speaker 3: I would say it's all of the above. Right.
Speaker 8: So really, if you think about it from the angle
Speaker 8: of brand consideration, a brand is really that, like, there
Speaker 8: is so much that goes into that. It's a long
Speaker 8: term relationship that you build with somebody, right, And so.
Speaker 2: I mean I've had my AMEX to be you know,
Speaker 2: full disclosure since college, and.
Speaker 3: So that's a long time.
Speaker 8: Well we thank you for that, We thank you for that.
Speaker 8: But but yeah, I mean I think it is that
Speaker 8: like every single touch point, it's it's like a relationship
Speaker 8: with anybody else. Right, We're obviously right this from a
Speaker 8: brand perspective, right, but just the same way you would
Speaker 8: build a relationship with anybody else. It takes many many
Speaker 8: touch points to get to that, right, You build a
Speaker 8: trust the relationship other. Yeah, that's what we're really here
Speaker 8: to do.
Speaker 4: You know. It's funny. I actually surprised to see that
Speaker 4: there is one of your biggest competitors here as one
Speaker 4: of the sponsors, as well, you don't oftentimes see that
Speaker 4: when with different events that make.
Speaker 3: You angry, we just do about is.
Speaker 4: It going to be my question?
Speaker 3: I would be a little angry she is.
Speaker 4: Going to skip twenty twenty five when she comes back.
Speaker 4: But how do you stand out an environment where you know,
Speaker 4: Chase does have an airport lounge, Chase does have a
Speaker 4: lounge here. How do you justify to a member paying
Speaker 4: seven hundred dollars a year where when there are competitors
Speaker 4: out there who offer similar experiences.
Speaker 8: I think for us, we stay focused on our card
Speaker 8: member base and that future card member base. Right, So
Speaker 8: we're constantly looking at right, what is the data, what
Speaker 8: is the feedback? What are all the different places that
Speaker 8: people are going to show up for us?
Speaker 5: Right?
Speaker 8: We've been here for thirty one years at the US Open,
Speaker 8: but this is one of an entire portfolio by the
Speaker 8: way of the places that we are, whether that be
Speaker 8: in like lifestyle, entertainment, music. Last year we kicked off
Speaker 8: our and announced our partnership with Formula one in the
Speaker 8: America's region, right, and so right we are staying ahead
Speaker 8: of in terms of like all the passion points in
Speaker 8: the places where the people that are our car members
Speaker 8: want to be and so that is really like if
Speaker 8: you think about it from a holistic perspective, right, it
Speaker 8: is about the holistic offering.
Speaker 2: Liz, talk to us a little bit about the pathic
Speaker 2: I think of you know, pre pandemic, pandemic hits, right,
Speaker 2: nobody's traveling, and you guys did a lot of things
Speaker 2: to adapt to people being at home. And then we're,
Speaker 2: you know, slowly coming out of the pandemic. And now
Speaker 2: we're you know, we've seen a ton of traveling. Like
Speaker 2: where are we post pandemic? What you guys are seeing
Speaker 2: from consumers?
Speaker 8: Yeah, Actually, we had a twenty twenty four Business as
Speaker 8: a Travel Trends report that we released and actually, when
Speaker 8: we look at that, almost seventy percent of people are
Speaker 8: going to be traveling this year and it's related to
Speaker 8: some type of big sporting event or event or other.
Speaker 8: So the trends there are like looking up and up
Speaker 8: as we think about that intersection of travel, fandom, et cetera.
Speaker 2: The Olympics, Like, did you see it lack connected to
Speaker 2: that as well?
Speaker 8: Olympics, right, like any big sporting moment, Like last year
Speaker 8: was Las Vegas Grand Prix. It was the first ever
Speaker 8: Formula One race out in Las Vegas.
Speaker 3: Right, yeah, I think so too one of our colleagues.
Speaker 3: Oh fantastic.
Speaker 8: Yeah, So, like you think about those types of moments
Speaker 8: and how do you bring that to life, Like in
Speaker 8: American Express, we're at the intersection of all event travel,
Speaker 8: big events, other so.
Speaker 4: When you think about growth in the future and attracting
Speaker 4: those card members who don't exist yet, who are not
Speaker 4: who have not signed up, how do you think about
Speaker 4: adding different features and experiences to keep the value proposition fresh?
Speaker 4: Like what's on the what's on the the whiteboard with
Speaker 4: brainstormed ideas right now?
Speaker 8: Yeah, I think it is. It is about that, right,
Speaker 8: it is about where are the trends going? And like
Speaker 8: how do you anticipate that as much as you can?
Speaker 8: This year, you know, it's been really exciting. Yeah, in
Speaker 8: like the area of like even music, Like we've actually
Speaker 8: done quite a bit with like the likes of Olivia Rodrigo,
Speaker 8: Billy Eilish, Dua Lipa, and so you know, we've been
Speaker 8: able to do some really incredible moments and experiences and
Speaker 8: access for our card members, not just here in the US,
Speaker 8: but also globally as well.
Speaker 3: When you look at the consumer we've got to ask you.
Speaker 2: We'd be idiots if we didn't, and we are bloomberg like,
Speaker 2: do you feel like and I know American Express every
Speaker 2: time we talk about the company, we say it's a
Speaker 2: certain sector of consumers. But like I said, I got
Speaker 2: mine in college. I was making no money, but that's
Speaker 2: where I started. Is the consumer doing okay? Or do
Speaker 2: you see any concerns that? I mean, we look around
Speaker 2: here and we're like, consumers are spending big time?
Speaker 3: Are here?
Speaker 8: Yeah? I mean, listen, I think at some of the
Speaker 8: biggest moments that are out there in sports and entertainment,
Speaker 8: people are there. I mean, that's what we're seeing. That's
Speaker 8: what we want to provide for our card members. And
Speaker 8: so I think it's an exciting twenty twenty four has
Speaker 8: been a very exciting year for all sorts of events
Speaker 8: around the world.
Speaker 4: Are you here all two weeks?
Speaker 3: I'm here. Yeah, I'm here for a good number of days.
Speaker 8: Yes, what a bad place to be, right, I might
Speaker 8: take out the line or something.
Speaker 2: Thank you so much. Great snapshot of what you guys
Speaker 2: are doing. And like we said, you have been American
Speaker 2: Express affiliated with it for thirty years with the US Open, which.
Speaker 3: Is a really really long time. She Suzuki.
Speaker 2: She's vice president of Global Brand, Sponsorships and Experiential Marketing
Speaker 2: at American Express.
Speaker 3: Joining us on site from the US Open.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
Speaker 1: each weekday starting at two pm Eastern on Apple car
Speaker 1: Play and Android Auto with the Bloomberg Business App. You
Speaker 1: can also listen live on Amazon Alexa from our flagship
Speaker 1: New York station Just Say Alexa playing Bloomberg eleven thirty.
Speaker 2: Bloomberg Business If you're alive at the US Open and
Speaker 2: flashing meadows Queen. We often say when broadcasting from the
Speaker 2: US Open that, Yep, no doubt, it's about the tennis.
Speaker 2: It's what you see on the courts, the players, the matches.
Speaker 2: But to be fair, coming to the US Open is
Speaker 2: quite an experience.
Speaker 4: It's the food, the merge, the people watching, the lounges
Speaker 4: and yes, Carol, your prized honey deuces.
Speaker 3: I still have my cup from last year?
Speaker 4: Did you bring it back this year?
Speaker 3: I did?
Speaker 4: You're gonna get another one still tomorrow, We'll see, we'll see.
Speaker 2: As for the food, the year, the team this year,
Speaker 2: the team that's behind it all. They recruited more than
Speaker 2: twenty New York City restaurants to serve their signature food
Speaker 2: and drink items at various dining venues, and you can
Speaker 2: see it as you walk around the center, the Tennis
Speaker 2: Center throughout.
Speaker 3: The two weeks of the tournament. So to talk about
Speaker 3: it all, as Chris Studley, he's back with us.
Speaker 2: He's managing director of Event Services at the USTA right
Speaker 2: on site here at the US Open.
Speaker 3: Nice to be back with you. How are you?
Speaker 5: Thanks for having me back. I'm great.
Speaker 9: We've had a great year. Of course, you kicked off
Speaker 9: with Fan Week just a little over a week ago.
Speaker 9: Welcome more folks than ever before to our site during
Speaker 9: that period.
Speaker 5: People are finding out about it.
Speaker 9: Right, we don't have tickets that week, and people are
Speaker 9: flooding out here to check out the action, get close
Speaker 9: to the players.
Speaker 4: Is all food and beverage that's available this week and
Speaker 4: next week available during fan Week.
Speaker 5: It's a great question.
Speaker 9: So years prior, we've kind of opened up slowly, but
Speaker 9: we knew that we were promoting this and trying to
Speaker 9: get more fans interested in it, so we opened the
Speaker 9: entire food village. We opened a few restaurants as well,
Speaker 9: that wouldn't have been opened in the past, and people
Speaker 9: really responded, well, I mean the fans that came out
Speaker 9: over two hundred and sixteen thousand of them. So we
Speaker 9: set all kinds of records and people realized what a deal.
Speaker 9: I can come on the site for free. I can
Speaker 9: get up close with the stars of today. It's incredible.
Speaker 3: It is pretty incredible. Right.
Speaker 2: We were talking with Kirsten Koreo about it earlier, having
Speaker 2: said that, how do you think about the experiences that
Speaker 2: you want in terms of hospitality, because we certainly see
Speaker 2: certain things that come back every year, but then there's
Speaker 2: some new stuff.
Speaker 3: So tell us about kind of the menu that you
Speaker 3: think about.
Speaker 9: Absolutely, So we look at all the data, right, we
Speaker 9: have spreadsheet upon spreadsheets.
Speaker 5: I don't want to bore you with those details.
Speaker 9: It's more fun to talk about the drinks.
Speaker 5: Sure, So that's so cool.
Speaker 4: Readsheet is our language.
Speaker 9: So we can look back and look at sales over
Speaker 9: prior years. I mean I'm talking dating back to over
Speaker 9: ten years ago, and we can see the trends in everything. Right,
Speaker 9: what's the hot item? What needs to stay if you will?
Speaker 9: What what are we looking at that may not move,
Speaker 9: what's not moving the needle.
Speaker 5: What are our fans asking for? Maybe they're not buying.
Speaker 9: So we we go in every year with a fresh
Speaker 9: perspective of Hey, in this stand, there's three or four items,
Speaker 9: this one's on the bottom.
Speaker 5: Let's refresh that. Let's do something new with it and
Speaker 5: see if it responds.
Speaker 9: So it gives us that opportunity and just like that,
Speaker 9: over the years, when we've evaluated like this, we've gotten feedback, Hey,
Speaker 9: try this, try that, and it actually shapes the food
Speaker 9: village a little bit every year. We piloted last year,
Speaker 9: in the year before we were piloting a mobile ordering system,
Speaker 9: we realized that our event, our fans weren't really interested
Speaker 9: in it. What they wanted to do was take that
Speaker 9: walk down the food village you mentioned yourself.
Speaker 5: I don't know.
Speaker 2: I kind of love doing it and like looking at
Speaker 2: but there are sometimes lines and I'm like, I can't
Speaker 2: I can't wait.
Speaker 4: Job is to make sure they're live.
Speaker 3: How do you do that?
Speaker 9: Well, you know, we look at everything from the technology
Speaker 9: that we use to process the transactions down to how
Speaker 9: the honeyduce is made in a tap system. Now, so,
Speaker 9: by the way, you get the perfect ratio of vodkaa
Speaker 9: lemonade to raspberry look or.
Speaker 4: Autocato. Yeah, the melon they have a Chipotle to make
Speaker 4: them all in.
Speaker 3: I like, is there something for.
Speaker 9: The un there is, there's a type system. Yeah, well
Speaker 9: the Mellon ball is so interesting story about those. You know,
Speaker 9: we're projected hopefully do a half a million honey duces
Speaker 9: this year. I think three mellion balls per honeyduce. You're
Speaker 9: talking one point five million Mellon balls. And we have
Speaker 9: a team that puts them on skewers. So they come
Speaker 9: in bald already, but there is a team.
Speaker 5: But they come balld. Okay, they come bald.
Speaker 2: We have Yes, I'm just going to say it could
Speaker 2: be like Chris is handing.
Speaker 3: You're here to get the assignments. You're on the Mellon
Speaker 3: ball team.
Speaker 2: I'm really sorry, but you're going to be like making
Speaker 2: Mellon balls in the back of it.
Speaker 5: The unsung heroes for sure.
Speaker 2: You're going, Yeah, how much revenue does the honey juice
Speaker 2: bring in?
Speaker 3: What can you tell us? You know, he saw some numbers,
Speaker 3: so I'm curious.
Speaker 5: What are you say?
Speaker 3: Nine million dollars in sales?
Speaker 9: That's probably fair and were last year we sold about
Speaker 9: four hundred and sixty two thousand, all right, and how
Speaker 9: much are they eat?
Speaker 5: Twenty two last year, twenty three this year?
Speaker 4: Okay, he held you sold?
Speaker 5: How many last About four hundred and sixty two thousand?
Speaker 4: Okay, So yeah, so that's about ten point six million.
Speaker 3: Okay.
Speaker 2: So our listener Sedron, who's very into tennis, is going
Speaker 2: to be here tomorrow. Combine the men's women's tournament win
Speaker 2: winners get seven point two million in winnings, so you're
Speaker 2: making more.
Speaker 9: Well, we have to pay the whole pool of prize money.
Speaker 5: Who watch more. There's a lot of other players that
Speaker 5: aren't the one.
Speaker 2: What if?
Speaker 4: What if the winning prize money was based on just
Speaker 4: honeyduce revenue?
Speaker 2: So you take a percentage equal prize player says, I'll
Speaker 2: have a percentage of the honey duce.
Speaker 4: The players are like, go buy your honeyduces.
Speaker 5: Listen. It all helps the fan experience, right.
Speaker 2: Everybody in our newsroom was coming up, like you go
Speaker 2: to the US OP and I wish you were there.
Speaker 2: Our Scarlet Food said to me, wait a minute, so
Speaker 2: where did the honey deuce recipe come from?
Speaker 5: Great question? I've been asked that a couple of times recently,
Speaker 5: you know, because we keep.
Speaker 3: Talking about how she always has good questions.
Speaker 9: Well, funny enough, this is the first year we actually
Speaker 9: did Honey due merchandise. So you can get a Honey
Speaker 9: Ducee hat or T shirt with the recipe on the back.
Speaker 9: And they sold like wildfire, according to our merchandise.
Speaker 5: Yeah, yeah, it was really popular.
Speaker 3: So where did it come up from?
Speaker 4: Where?
Speaker 5: How did it come about?
Speaker 9: It came up from a grey Goose mixologist and a
Speaker 9: few USCA folks in a kitchen here on site over
Speaker 9: fifteen years.
Speaker 5: Ago, just before I joined the organization. I think I
Speaker 5: can't take any.
Speaker 3: Credit for it, but it must have been a fun kitchen,
Speaker 3: you know.
Speaker 5: Absolutely, they were experiment again.
Speaker 9: They sat there and tried every different cocktail and what's
Speaker 9: the world that resonated the most?
Speaker 5: Right? What was the flavor of summer so to speak.
Speaker 9: So then they even came up with the three melon
Speaker 9: balls to represent the tennis balls and a can.
Speaker 5: So not everybody realized that, but yeah, was.
Speaker 4: That lightning in a bottle? I mean, you know the
Speaker 4: way that I talk about the us open to people,
Speaker 4: they always say, what does that drink?
Speaker 5: What does that drink?
Speaker 4: What does that drink.
Speaker 3: Yeah, everybody to do.
Speaker 4: Yeah, everybody knows about it.
Speaker 9: It's grown over time, right, it's just taken on its
Speaker 9: own persona. Thanks social media for that. Right as that
Speaker 9: took off, the Ducee takes off. It's cool to come
Speaker 9: take your picture with the honey Due.
Speaker 2: So when are you going to do a mocktail again?
Speaker 2: Elizabeth asks us, who says, I'm going to come, But
Speaker 2: I don't know that I want to drink alcohol, but
Speaker 2: I'd love to have a Honeyducee mocktail.
Speaker 9: You know, we'd have to talk to our partners at
Speaker 9: greg Goose and kind of figure something out if we
Speaker 9: can do that.
Speaker 5: But we do all for some.
Speaker 4: Everything without the minus the vodka, minus the key.
Speaker 9: You can have lemonade, lemonade and some melon balls. Yes,
Speaker 9: with melon balls. We do offer a few mots on
Speaker 9: the site. It is a category that's growing, totally.
Speaker 2: Growing, So many guests come on and it's non alcoholic beer, beers,
Speaker 2: wines like.
Speaker 4: You name it.
Speaker 9: Well, we do serve the Heineken zero point zero, which
Speaker 9: is quite delicious for a non alcoholic beer.
Speaker 5: So there are a good partner of ours as well.
Speaker 4: On the food side of it, the prep time. That
Speaker 4: goes into actually making sure that there are minimal lines
Speaker 4: even though there are still lines. How do you have
Speaker 4: the balance of making sure that you know that the
Speaker 4: chefs are prepping ahead of time, but also making stuff
Speaker 4: to order. You're not going to get something soggy.
Speaker 9: Yes, So their goal is to not make you know
Speaker 9: the finished product days in advance for frending stretch. You know,
Speaker 9: they're professionals what they do. I mean even the best
Speaker 9: restaurants in New York City do a lot of prep uh,
Speaker 9: and they know where they can kind of cook the
Speaker 9: item too until they have to serve and then obviously
Speaker 9: finish it. So they're the pro at that. I don't
Speaker 9: claim to be. I'm not a chef at all, nor
Speaker 9: do I work in a kitchen. But you're operations guy,
Speaker 9: operations guy through and through, so you know they know
Speaker 9: what's best.
Speaker 5: I trust them. They know what they're doing.
Speaker 9: We work with Levy Restaurants, which is a division of
Speaker 9: Compass Group. They're around the world, they know what they're doing,
Speaker 9: their process.
Speaker 2: So do you have kitchens like all set up all
Speaker 2: over like all over and stuff's coming in off site?
Speaker 5: Yeah.
Speaker 9: We have about seven commissaries on site I'm talking massive kitchens.
Speaker 9: We even have one underneath the grandstand. The public would
Speaker 9: have no idea where it is. Kitchens in the back
Speaker 9: of every restaurant, so fresh as food possible. It's built
Speaker 9: to serve the areas that they're in.
Speaker 4: So yeah, from an operations perspective, talk to us about
Speaker 4: how you're using technology to sort of offset where people
Speaker 4: maybe add more people, where people are going add more
Speaker 4: stuff there. What's the tech side of this?
Speaker 9: So on the tech side not necessarily tied to food
Speaker 9: and beverage, so much more tied to seating our fans,
Speaker 9: especially the first week of tennis right now with so
Speaker 9: many grounds, passes and matches going on everywhere. We actually
Speaker 9: have cameras aimed at every bleacher, so you can kind
Speaker 9: of get an idea of where you're going to go, green, yellow, red,
Speaker 9: for you know, which has seating available to kind of
Speaker 9: point people in the right direction to catch the tennis.
Speaker 4: Love that all right?
Speaker 2: What's the most exclusive dining experience here?
Speaker 9: Exclusive dining Aces and Champions are two signature restaurants on
Speaker 9: the club level of ash. You either need a court
Speaker 9: side ticket or a sweet ticket to access them. Those
Speaker 9: are probably what people just die to get into. The
Speaker 9: reservations are off the charts.
Speaker 3: And what's this chicken?
Speaker 4: The lowly media pass Carol will not get you in.
Speaker 5: Yeah, let me know if you guys need.
Speaker 3: It's okay.
Speaker 2: I got my French fries before. What's this chicken dish
Speaker 2: with caviar?
Speaker 9: So Coco Doc by restaurant tour Simon Kim So if
Speaker 9: you've heard of it, popular restaurant in the city right.
Speaker 4: Now, House knows about them.
Speaker 9: So we have the stand on the club level of
Speaker 9: Arthur ash Stadium and it is just unbelievable.
Speaker 5: I mean you can get regular.
Speaker 9: Chicken nuggets with dipping sauces all the way up to
Speaker 9: truffle nuggets or the caviar covered nuggets, and it's selling crazy.
Speaker 4: I'm going to ask you this question that I asked
Speaker 4: Kirsten just in the last twenty seconds we have with you.
Speaker 4: What's the what's the big difference that you're already planning
Speaker 4: for next year? What's something new that's coming in twenty five?
Speaker 4: What are you thinking about.
Speaker 9: We're always looking at new chef's, new restaurants, what people
Speaker 9: are craving. I'll get back to you after I look
Speaker 9: at all the data.
Speaker 4: Always working this guy is always working, always looking at
Speaker 4: the data.
Speaker 3: That is such. That is such cool stuff. Thank you
Speaker 3: so much. And cardible Deli's.
Speaker 4: Back to they are it's popular, very cool, stormy sandwich.
Speaker 4: Maybe hey, I already had what I I have know
Speaker 4: you at something Chicken euro something delicious.
Speaker 3: Great, Chris, thank you so much. Thanks for good luck
Speaker 3: with it.
Speaker 2: Chris Dudley, he's managing director of Events Services at the USTA,
Speaker 2: joining us right here on site at the US.
Speaker 4: Open brom.
Speaker 1: Journal.
Speaker 3: Now about you let me drive?
Speaker 8: Oh no, no, no, no, alright please, I'll gravelt.
Speaker 2: I want to drive.
Speaker 3: It's a good question.
Speaker 1: This is the drive to the clothes down communing well
Speaker 1: Brier on Bloomberg Radio.
Speaker 2: All right, everybody, just about eighteen minutes left in today's
Speaker 2: trading session. We are definitely driving to the clothes on
Speaker 2: this Thursday. You've got equities, as you just heard from
Speaker 2: Amy Morris, definitely off their highs of this session. And
Speaker 2: we did see some movement on the treasury side of
Speaker 2: things following this morning's economic report.
Speaker 3: Upbeat growth is still happening. That's a good thing. Maybe
Speaker 3: a recession won't happen.
Speaker 2: We'll have to see what our next guest has to
Speaker 2: say with us is a treat John Mussau, he's chief
Speaker 2: executive officer, director Fixed Income at Cumberland Advisors, a firm
Speaker 2: that has been around for a half a century or so,
Speaker 2: and of course a good friend David Kotek. I think
Speaker 2: about it, like we've talked lots of conversations. You guys
Speaker 2: have seen a lot of market cycles.
Speaker 5: Yeah, let's do it.
Speaker 2: What does this one tell you?
Speaker 7: We think it's elongated because of COVID, so everything takes longer. Yeah,
Speaker 7: you know, it took a while for inflation to set in,
Speaker 7: took longer. It took longer for the Fed to raise rates.
Speaker 7: It's taken a longer time for the Fed to start
Speaker 7: cutting rates, which looks like it's going to happen next month.
Speaker 7: And it's taken a while for inflation to come back down,
Speaker 7: which seems like it's finally taking place as well.
Speaker 3: So we're getting back to normal.
Speaker 7: Getting whatever normal, whatever normal is, is taking longer.
Speaker 5: To get there.
Speaker 4: Are you concerned that the Fed waited too long to
Speaker 4: cut rates?
Speaker 7: I am, and because I think there's a lot of
Speaker 7: anecdotal evidence out there that the economy is moving lower,
Speaker 7: maybe a little faster than people think you could almost
Speaker 7: read it a little bit of it into j Powell's language,
Speaker 7: because it seems like he shifted in his not only
Speaker 7: his talk at Jackson Hall, but at the FED meeting
Speaker 7: before that, from a concern about inflation per se to
Speaker 7: a little more concern about the job market and that
Speaker 7: their movements going forward would be to probably hopefully keep
Speaker 7: the job market from slide down, don't you.
Speaker 2: Think, though I don't know, these aren't exact sciences, right,
Speaker 2: especially when you're getting ready to pivot right. It's a
Speaker 2: little tricky, and I mean, I don't know what's worse.
Speaker 2: I mean, obviously, if people are losing jobs, that's not
Speaker 2: going to be a good thing for the economy.
Speaker 3: But I also know that you've got to tame the
Speaker 3: inflation beast.
Speaker 2: But I also do wonder, John, we talked about normal,
Speaker 2: is it a different normal when it comes to where
Speaker 2: inflation needs to run going forward because of some different
Speaker 2: macro factors, whether it's wars or climate change or whatever.
Speaker 7: There's a lot of that at work. In the end.
Speaker 7: I'm always a little distrustful when someone says this time
Speaker 7: it's different, you know, and you've had people say that,
Speaker 7: particularly when you talk about something like the inverted.
Speaker 5: Yell crew for example.
Speaker 7: They're saying it doesn't matter anymore because now you're like
Speaker 7: a year past a year and a half and we
Speaker 7: haven't gone into a slowdown.
Speaker 5: I would suggest that you can still wait and.
Speaker 7: See that and why because COVID has extended that time
Speaker 7: period there was so much space in the system. You're
Speaker 7: starting to see things like and you've had other guests
Speaker 7: talk about it, higher rates of people, you know, not
Speaker 7: paying their credit cards.
Speaker 5: You're seeing it.
Speaker 7: I see it personally in my email every week where
Speaker 7: I'm getting resumes from either people that have lost jobs
Speaker 7: in financial services, but also from kids getting out of
Speaker 7: college that can't get jobs.
Speaker 5: That's a far cry from where you were two years ago.
Speaker 4: Now that doesn't you know, list, is this a normalization
Speaker 4: or is this concerning to you?
Speaker 7: It's it's I see it as a normalization given the
Speaker 7: hot market.
Speaker 4: You were in two years Like, this is pre COVID
Speaker 4: levels pre COVID.
Speaker 7: Yeah, yes, you're a pre COVID levels, but moving moving
Speaker 7: in the downward direction, right, So that's that's a bit
Speaker 7: of a concern.
Speaker 2: But that's a great question, Like, so is it if
Speaker 2: we're getting back to normal, which is just getting back
Speaker 2: to normal.
Speaker 3: But getting back to normal can be painful on the.
Speaker 7: Economy, sure, you know, especially if you're the one losing
Speaker 7: their job, and you know, there's there was no question
Speaker 7: that most, if not all, of these COVID funds were spent,
Speaker 7: and that is what of course caused that, not damage,
Speaker 7: but the cycle that we did see on inflation. And
Speaker 7: I think you would not necessarily have been here if
Speaker 7: maybe the FED had acted sooner back in twenty twenty one.
Speaker 5: Then you know, wait until this March of twenty.
Speaker 4: Two to their defense, and I think is still the
Speaker 4: jury isn't necessarily still out, but I think there was
Speaker 4: still supply chain challenges that led to some of the
Speaker 4: inflation pressures that we saw.
Speaker 7: I would agree with you, Tim, and I don't think
Speaker 7: it was just that. I think it's the Fed, like
Speaker 7: back during the Great Recession, where they kept short term
Speaker 7: regis rates at zero a quarter for god seven years,
Speaker 7: the same concerns were this time. They did not want
Speaker 7: to see employment slide back just as it was coming out,
Speaker 7: and they would err on that side.
Speaker 4: Hey, let's talk politics, because everybody loves talking about politzing
Speaker 4: going on. Yeah, nothing going on right, nothing happened in November.
Speaker 4: How should pond investors think about these two candidates.
Speaker 7: Listen, we saw in twenty sixteen, we saw yields move
Speaker 7: up when Trump got elected out overnight and yield shot up,
Speaker 7: and they stayed elevated for the better part of about
Speaker 7: nine ten months before they started to come down. You
Speaker 7: saw that same reaction after the first debate, and yields
Speaker 7: bounced up about almost twenty five basis points from where
Speaker 7: they were because people started to assume not only a
Speaker 7: Trump winning the election, but also a particularly after the
Speaker 7: assassination offempt, a sweep of Congress, both the House and
Speaker 7: the Senate. And that perception is, oh boy, if everybody's
Speaker 7: on the same side, they're going to start spending money,
Speaker 7: you know, just like a party.
Speaker 4: But is it also the idea that if Trump were
Speaker 4: to win, he would and he's talked openly about this,
Speaker 4: the idea of maybe pressuring the FED or having input
Speaker 4: to the FED when it comes to interest rates. He's
Speaker 4: talked about that, he says, as.
Speaker 5: Much is talked about it.
Speaker 7: I think if he really wanted.
Speaker 4: To think, some people are worried about the credibility of
Speaker 4: the FED in a situation r right.
Speaker 7: My own thought is that if he won, he would
Speaker 7: keep J. Powell in there at least to the end
Speaker 7: of his term in twenty eight. And one of the
Speaker 7: reasons there is that he appointed stuff. You know, you know,
Speaker 7: there's some credence level there, right. But I do think
Speaker 7: that the idea that if all parties White House, Senate
Speaker 7: and House of Representatives are on the same side, that
Speaker 7: is regardless of who's in power, Democrats or Republicans, because
Speaker 7: you spend because there's no check in balance. So I
Speaker 7: think the market started to assume.
Speaker 4: Hey, but my question is more about rates and pressure
Speaker 4: that he would put on any FED chair, whether it's
Speaker 4: Powell or not. He said he has said that he
Speaker 4: thinks the president should have input when it comes to
Speaker 4: is it.
Speaker 3: More bark than bite?
Speaker 5: I think it's I think it's more.
Speaker 7: I think it's more barked than bite, certainly because the
Speaker 7: last thing he wants to do is have the financial
Speaker 7: markets go into a you know, volatility mix, right, because
Speaker 7: of what.
Speaker 3: He's saying, right, they will have no credibility.
Speaker 2: He will have no credibility. It's not about FED not
Speaker 2: having credibility, no, no, All right, got about a minute lapped,
Speaker 2: So how do you invest? You know, you're playing in
Speaker 2: the fixed income world. As we're getting ready for a
Speaker 2: FED pivot, we think, like, what's your advice to investors?
Speaker 7: I think I think that you know, listening, you don't
Speaker 7: have the yields like they were last you know, would
Speaker 7: fall right when when the ten year hit five percent.
Speaker 3: It's people we're talking six percent.
Speaker 7: Yeah, you're three eighty five. You can make a good
Speaker 7: case of inflation's coming down. We think bonds offer some
Speaker 7: good value. We think tax free municipal bonds offer a
Speaker 7: really good value because they're backed up by a lot
Speaker 7: of supply. So there's a lot of high quality, investment
Speaker 7: grade intermediate longer bonds and four percent plus tax feels
Speaker 7: that's like over seven.
Speaker 2: When you're computing if you're looking at the curve. You
Speaker 2: mentioned muni's, But where would you go on the curve?
Speaker 2: Would you go shorter duration at this point?
Speaker 7: No, no, no, We would barbell it with some short
Speaker 7: term bonds, but also some bonds out in fifteen years
Speaker 7: or so, fifteen to twenty years, because you're getting about
Speaker 7: ninety percent plus of the available yields out in thirty years.
Speaker 7: So we think that is very good value and listen.
Speaker 7: You know that if Democrats win, you have a good
Speaker 7: chance of tax rates going up, so they present some
Speaker 7: good value, good stuff.
Speaker 3: What a pleasure, what a treat, say aboad to David.
Speaker 5: Really nice to see a pleasure.
Speaker 3: John Whosso.
Speaker 2: He is of course Chief executive Officer, Director of Fixed
Speaker 2: in Coomic Humberland Advisors.
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