WEBVTT - Alex Rodriguez Talks MLB's Collective Bargaining Deal & Sports Investing

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news.

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<v Speaker 2>Carol Masser, Tim Stedevick. Life here at Bloomberg invest in

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<v Speaker 2>downtown New York City. So happening just a while ago

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<v Speaker 2>right here at Bloomberg invest a live taping of the

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<v Speaker 2>hit podcast The Deal with Alex Rodriguez and BLOOMBERGS Jason Kelly.

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<v Speaker 2>They were sitting down with Alex Waxman, the CEO of

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<v Speaker 2>Sixth Street. Alex Rodriguez, as you know, of course, chairman

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<v Speaker 2>and CEO of A Rod Corp. He's also co owner

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<v Speaker 2>of the NBA's Minnesota Timberwolves and the WNBA's Minnesota Links,

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<v Speaker 2>and he's a former three time American League MVP. But

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<v Speaker 2>we all know that. How are you.

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<v Speaker 3>I'm doing great, good to be here. Good to see

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<v Speaker 3>you guys, Well, good to see you.

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<v Speaker 2>Tell us a little bit about Alex Saxman and the

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<v Speaker 2>taping for The Deal.

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<v Speaker 3>Incredible story.

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<v Speaker 4>I mean, his background, and he spent ten years at

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<v Speaker 4>gold Masax and he basically ran a thirty billion dollar

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<v Speaker 4>fund in which they can invest in any asset class,

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<v Speaker 4>which really gave him a competitive advantage. He's now brought

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<v Speaker 4>that over when he co founded sixth Street two thousand

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<v Speaker 4>and nine. They have over one hundred million dollars in

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<v Speaker 4>AUM and he's really deep in sports. He's done investments

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<v Speaker 4>with all major leagues. He's done the San Francisco Giants baseball,

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<v Speaker 4>He's done the Celtics and San Antonio Spurs in basketball.

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<v Speaker 4>And he just bought a minority steak with Jonathan and

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<v Speaker 4>Robert Kraft with the New England Patriots. Fascinating and great,

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<v Speaker 4>great conversation.

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<v Speaker 1>So I'm curious about the opportunities that he sees right now.

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<v Speaker 1>And you know, obviously he's taking advantage of the new

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<v Speaker 1>rules about being able to buy into different leagues, which

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<v Speaker 1>is a whole conversation that we could have. But what

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<v Speaker 1>really excites him when he looks forward, I.

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<v Speaker 4>Think a few things. I think markets, depending on what team,

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<v Speaker 4>what leagues, what league, the leadership of the three leagues.

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<v Speaker 4>Fortunately for us we have you know, Adam Silver, Roger

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<v Speaker 4>goodowin football, and Rob Manford all very established, very top

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<v Speaker 4>tier commissioners.

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<v Speaker 3>So all that's good for him.

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<v Speaker 4>And I think when you look at the NFL, the

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<v Speaker 4>combination of appreciation in cash flow is something that's very

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<v Speaker 4>very unique in sports.

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<v Speaker 3>You don't have usually both of those.

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<v Speaker 4>So aggressively, so I think he's really concerned and not concerned.

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<v Speaker 3>I would say this baseball is an interesting situation.

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<v Speaker 4>I think baseball is the best opportunity to invest today.

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<v Speaker 4>I'm a concern by nature, So I would invest right

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<v Speaker 4>into the teeth of this collective bargain agreement. Why Because

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<v Speaker 4>I think you can buy at very, very attractive multiples

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<v Speaker 4>and you're making I think two very safe bets. One

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<v Speaker 4>that the CBA will get better, not worse right, And

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<v Speaker 4>the second one is that Rob Manford would take a

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<v Speaker 4>page from Roger Goodell and consolidate all the regional sports

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<v Speaker 4>rights and make it more into national rights, and you

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<v Speaker 4>get an expansion of multiples.

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<v Speaker 1>So will there be a labor stoppage after this season?

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<v Speaker 3>I hope not.

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<v Speaker 4>I don't know, but I've talked to members of both

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<v Speaker 4>sides of the aisle and they have said meaning owners

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<v Speaker 4>and players, and they're both dug in pretty pretty strong,

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<v Speaker 4>so is what you're saying.

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<v Speaker 3>So I don't know.

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<v Speaker 1>Would that change your view on investing in baseball.

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<v Speaker 4>No, I would invest in even heavilier into it because

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<v Speaker 4>as you have more noise, as we've seen in the

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<v Speaker 4>public markets in the last couple of days. You have

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<v Speaker 4>volatility where you have apprehension, I think you have opportunity.

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<v Speaker 3>And the multiples.

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<v Speaker 4>If you could buy a baseball team in four or

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<v Speaker 4>five multiple versus other sports that are trading in mid teens,

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<v Speaker 4>I think that's an opportunity.

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<v Speaker 2>Would the players ever agree to a salary cap? You think?

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<v Speaker 3>I don't think so. I don't think so.

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<v Speaker 4>But I think I don't want to comment into that

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<v Speaker 4>because I have friends on both sides. But here's what

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<v Speaker 4>I would say. It should be a mentality about grow

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<v Speaker 4>the pie as big as possible. How you guys divide it.

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<v Speaker 4>That's a separate conversation. Yeah, but you know, going back

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<v Speaker 4>to Marvin Miller when he started the union for Major

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<v Speaker 4>League Baseball, which has always been very, very strong and

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<v Speaker 4>highly regarded and the owners, there's been a lot of

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<v Speaker 4>conflict over the last five decades. So how do you

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<v Speaker 4>bring it together to say, let's work together to grow

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<v Speaker 4>the pie as big as possible.

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<v Speaker 1>Why does it seem like baseball has the most issues

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<v Speaker 1>with labor.

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<v Speaker 4>I think it has a lot of Oh yeah, yeah,

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<v Speaker 4>I mean the history is very strong. Marvin Miller was

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<v Speaker 4>the head of the union, he started it. Then that

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<v Speaker 4>went to Don Fear for many years is a great,

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<v Speaker 4>great leader, and then Michael Wiener Tony Clark and now

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<v Speaker 4>they have a different situation right now. But it's been

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<v Speaker 4>that way tim since I was involved. I remember every

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<v Speaker 4>time CBA came it was it was a battle and

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<v Speaker 4>somehow or know you figured it out. But I will

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<v Speaker 4>say that this is the most important year for baseball

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<v Speaker 4>and labor talks in the history of the sport because

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<v Speaker 4>of how many attractions we have out there between Netflix, YouTube, Bloomberg,

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<v Speaker 4>you name it. There's just more assets that everyone's fighting

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<v Speaker 4>for the consumer.

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<v Speaker 1>So do you think about do you think about the

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<v Speaker 1>collective bargaining differently now that you're an owner of a

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<v Speaker 1>of a sports team.

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<v Speaker 3>That's a great question.

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<v Speaker 4>I think think overall, like ninety percent of my thoughts

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<v Speaker 4>is still the same as you want the sport to

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<v Speaker 4>be healthy, you wanted to grow, you wanted to collect

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<v Speaker 4>more fan base, and you want millions of people watching

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<v Speaker 4>every day because it is a great sport.

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<v Speaker 3>And the World Series this year showed us that when.

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<v Speaker 4>You have the right product, you have the right market,

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<v Speaker 4>you have the right superstars in Vladimir Garrero Junior and

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<v Speaker 4>Shohei o Tani, that you had fifty three million people

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<v Speaker 4>watching when you include the US, Canada, and Japan, which

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<v Speaker 4>to baseball still works.

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<v Speaker 3>Yeah. And when there's a lot of noise, there's a

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<v Speaker 3>lot of opportunity.

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<v Speaker 2>So when you know you talked about, you're right, sports

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<v Speaker 2>is vying for all of our attention with so many

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<v Speaker 2>other things. So when you think about investing, how do

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<v Speaker 2>you think about like, how does that play into where

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<v Speaker 2>you want to commit some money?

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<v Speaker 4>Well, you want to mote right, think about this. Take

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<v Speaker 4>the NBA. If you're a real estate investor and there's

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<v Speaker 4>only thirty beach front properties in the entire world, yeah, boy,

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<v Speaker 4>you would look do anything to own one of those.

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<v Speaker 3>So scarcity is a big deal.

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<v Speaker 4>When you look at the TV deal that just was

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<v Speaker 4>signed eleven years, when the first year of eleven years

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<v Speaker 4>for seventy seven billion, that's something that is easy to underwrite,

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<v Speaker 4>easy to understand. So you like to invest into that,

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<v Speaker 4>you know. And then when you think about the global

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<v Speaker 4>growth in the NBA, you know, twenty years ago there's

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<v Speaker 4>probably less than three percent of the league was global athletes,

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<v Speaker 4>meaning born outside of the US.

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<v Speaker 3>Today that numbers ballooned to thirty five percent. Right when

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<v Speaker 3>you look at Europe.

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<v Speaker 4>Second most popular sport in Europe the NBA basketball and

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<v Speaker 4>is a forty five billion annual business and we only

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<v Speaker 4>own one percent of that. At the same time, you

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<v Speaker 4>have four hundred million people playing basketball in China.

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<v Speaker 3>Yeah, three hundred million playing in India.

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<v Speaker 4>So the global scope, you can say from the American

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<v Speaker 4>sports NBA could be number one.

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<v Speaker 2>That's pretty impressive.

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<v Speaker 1>We always love it. When we get to uh, let's

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<v Speaker 1>talk to you a little bit, they're.

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<v Speaker 2>Gonna yell up.

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<v Speaker 1>Yeah, we've got to go.

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<v Speaker 2>I'm gonna go thirty seconds. What's on your night table?

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<v Speaker 2>What are you reading? Oh?

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<v Speaker 3>You know what I do is I love podcasts, So

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<v Speaker 3>you do?

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<v Speaker 2>What do you listening?

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<v Speaker 3>I love The Founders is one of my favorite.

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<v Speaker 4>And uh, what's the one that I'm the one that's

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<v Speaker 4>like three and a half hours I'm acquired. Acquired is fantastic.

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<v Speaker 4>I love those guys. Three four hours, I love it.

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<v Speaker 2>And how many hours are you watching Bloomberg?

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<v Speaker 4>I watched it a lot, Okay, and you guys do

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<v Speaker 4>a great work.

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<v Speaker 2>But thank you you as well. Alex Rodriguez, chairman and

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<v Speaker 2>CEO of A Rod Corp. And so much more, And

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<v Speaker 2>of course check out the deal with Alex and of

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<v Speaker 2>course Jason Kelly can find it on Bloomberg Originals