WEBVTT - Canceled College Sports Could Cost ESPN Millions 0:00:00.720 --> 0:00:03.720 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:03.800 --> 0:00:06.320 Jason Kelly. We're right here every day bringing you the 0:00:06.400 --> 0:00:11.160 latest news from the world's of business and finance, plus technology, politics, economics, 0:00:11.240 --> 0:00:14.280 all harnessing the power of Business Week reporters and editors. 0:00:14.440 --> 0:00:16.439 And of course Carol that's part of a team of 0:00:16.520 --> 0:00:19.959 twenty seven hundred journalists and analysts the more than a 0:00:20.040 --> 0:00:22.959 hundred and twenty countries and Jason. You can download Bloomberg 0:00:22.960 --> 0:00:26.079 Business Week on iTunes, SoundCloud, bl Bloomberg dot com. You 0:00:26.079 --> 0:00:28.280 can also listen to our radio show at two pm 0:00:28.320 --> 0:00:31.159 Eastern on Bloomberg Radio every weekday, or watch us on 0:00:31.200 --> 0:00:36.479 YouTube by searching Bloomberg Global News. Let's head over to 0:00:36.720 --> 0:00:40.200 a conversation with our friends at John's Hopkins. We're talking 0:00:40.240 --> 0:00:43.520 about ANIT assist road deputy director at John's Hopkins Center 0:00:43.560 --> 0:00:46.360 for Health, Security and effectult. Remember at the Bloomberg School 0:00:46.360 --> 0:00:47.720 of Public Health is you can probably tell by the 0:00:47.800 --> 0:00:50.000 name Bloomberg School of Public Health that is supported by 0:00:50.040 --> 0:00:53.280 Mike Bloomberg, the founder of Bloomberg Philanthropies and Bloomogulp, the 0:00:53.400 --> 0:00:57.280 parent of this radio station. Anita, really nice to have 0:00:57.440 --> 0:01:00.680 you back with us. So much going on, and I 0:01:00.720 --> 0:01:03.080 want to go straight to the issue that I know 0:01:03.360 --> 0:01:07.200 is completely front of mine as parents for both Scarlett 0:01:07.280 --> 0:01:10.959 and me, which is reopening schools. Where are we what 0:01:11.000 --> 0:01:15.679 do we do? Thanks Jason, and I'm with you. I 0:01:15.760 --> 0:01:19.400 also have two high school aged children who would love 0:01:19.440 --> 0:01:21.000 to be back in school, and I would love to 0:01:21.040 --> 0:01:24.240 have them back in school. UM. I think that the 0:01:24.280 --> 0:01:26.600 most important thing we can do to get our kids 0:01:26.640 --> 0:01:29.800 back in the classroom are really three things. One, we 0:01:29.840 --> 0:01:34.000 need to get community transmission under control UM. It's hard 0:01:34.040 --> 0:01:37.559 to send kids back to school when there are still 0:01:37.880 --> 0:01:42.360 raging outbreaks in our local communities UM. And then to 0:01:43.200 --> 0:01:47.960 one school's open, open them very gradually with tight mitigation 0:01:48.000 --> 0:01:51.160 measures that we know work like physical distance and mask 0:01:51.280 --> 0:01:55.880 us UM. And to get that physical space, we may 0:01:55.920 --> 0:01:58.840 need to prioritize some kids over others, so it would 0:01:58.840 --> 0:02:03.680 make sense to younger kids back UM before older ones. 0:02:03.760 --> 0:02:08.080 And then also maybe those most vulnerable or who need 0:02:08.280 --> 0:02:12.440 UM special attention in class. And then three, invest in 0:02:12.480 --> 0:02:16.760 research that we need to understand more about kids role 0:02:16.840 --> 0:02:20.360 in transmission of coronavirus, so we know in the future 0:02:20.560 --> 0:02:23.760 how how careful or how type those mitigation measures need 0:02:23.840 --> 0:02:26.519 to be to keep everyone's safe. Yeah, well that investment 0:02:26.560 --> 0:02:29.280 can't be at the expense of schools because they already 0:02:29.280 --> 0:02:32.560 have enough expenses to deal with enough headaches. Jason and 0:02:32.600 --> 0:02:34.360 I are both in the suburbs of New York and 0:02:34.400 --> 0:02:36.639 a lot of the public schools need to submit their 0:02:36.760 --> 0:02:40.200 proposals to the state Department of Education at the end 0:02:40.240 --> 0:02:42.240 of this month. So I've been hearing a lot of 0:02:42.280 --> 0:02:44.600 different proposals from schools on how they're going to make 0:02:44.639 --> 0:02:48.320 this work. One thing that strikes me though, and I'm 0:02:48.320 --> 0:02:51.680 always puzzled by this, it seems like we're reinventing the wheel. 0:02:52.040 --> 0:02:55.160 Other countries have done this. Canada reopened its schools in May. 0:02:55.200 --> 0:02:58.520 Taiwan never closed schools. Granted, taiwan situation never got to 0:02:58.520 --> 0:03:01.839 the point like China, uh, the United States, but other 0:03:01.919 --> 0:03:04.360 countries have done it. There are best practices that we 0:03:04.440 --> 0:03:07.840 can employ. Why are we kind of fumbling in the 0:03:07.919 --> 0:03:11.960 dark here when there are examples to draw from? There 0:03:12.000 --> 0:03:15.520 are a lot of good examples. But for the the 0:03:15.560 --> 0:03:20.320 countries that open school successfully, they had much lower prevalence 0:03:20.680 --> 0:03:24.480 of disease rates than we now do. Our outbreak is 0:03:24.840 --> 0:03:27.680 um there. You know, cases are increasing in most of 0:03:27.680 --> 0:03:31.519 the states, hospitalization rates for COVID are now matching or 0:03:31.560 --> 0:03:34.520 exceeding numbers seen in New York in March and April 0:03:34.680 --> 0:03:38.720 from In many states, UM hospitalizations are getting under pressure. 0:03:38.880 --> 0:03:43.080 So it's UM it's very difficult to think about opening 0:03:43.120 --> 0:03:46.600 schools and areas where the epidemic is spiraling out of control. 0:03:47.000 --> 0:03:51.720 For those that are able to reduce the prevalence of 0:03:51.760 --> 0:03:54.920 disease and communities, I think we can use a lot 0:03:54.960 --> 0:03:57.800 of the measures that have worked successfully in other countries 0:03:57.840 --> 0:04:00.480 and they will work for us to h So that's 0:04:00.480 --> 0:04:04.240 what we should be focusing on. And tell us about 0:04:04.280 --> 0:04:06.400 some of those I mean, what are some of those measures? 0:04:06.360 --> 0:04:08.040 I mean, you've talked a little bit about the social 0:04:08.040 --> 0:04:11.200 distancing and other things. Are there things that maybe aren't 0:04:11.240 --> 0:04:14.680 as UM well known that you've seen because you've looked 0:04:14.680 --> 0:04:17.039 into this much more in depth than most of us have. 0:04:19.240 --> 0:04:21.840 I think many of them people have heard of now. Certainly, 0:04:22.000 --> 0:04:26.680 physic six feet of physical distance is important, also requiring 0:04:26.800 --> 0:04:31.800 masks indoors. It can significantly decrease the chances of infection 0:04:32.400 --> 0:04:36.680 UM decreasing the number of students per class and as 0:04:36.760 --> 0:04:40.279 c d c UM put out its recent guidance. They 0:04:40.360 --> 0:04:43.800 emphasize the issue of cohorting. You know, get kids in 0:04:43.960 --> 0:04:48.880 smaller groups and keep that same cohort together throughout the day. 0:04:49.000 --> 0:04:51.520 Now that's a lot easier to do in elementary school 0:04:51.520 --> 0:04:54.680 than it is in middle and especially high school, when 0:04:54.760 --> 0:04:58.160 kids have different kinds of classes and you can move around. Um. 0:04:58.279 --> 0:05:02.560 But also ventilation is an important factor. I know schools 0:05:02.600 --> 0:05:05.920 are looking at ways to upgrade their ventilation systems, which 0:05:05.960 --> 0:05:09.440 really gets back to Scarlett's point about how costly it 0:05:09.600 --> 0:05:11.479 is for schools to be able to put all these 0:05:11.480 --> 0:05:15.080 measures in place. And then other um in schools and 0:05:15.120 --> 0:05:18.360 other countries have put up you know, plastic barriers either 0:05:18.400 --> 0:05:22.360 between students or we're in front of the teacher to 0:05:22.720 --> 0:05:26.240 give them additional safety. There's a lot of discussion about 0:05:26.240 --> 0:05:29.360 you know, Denmark and other places that helped classes outdoors 0:05:29.360 --> 0:05:32.279 as much as possible. That is a great idea, and 0:05:32.360 --> 0:05:35.080 we should be creative and thinking about other spaces to 0:05:35.200 --> 0:05:38.240 bring children. But it's not going to be possible for 0:05:38.640 --> 0:05:41.480 for all schools and all places in all states. Um 0:05:41.560 --> 0:05:45.040 As we you know start in the hot summer and 0:05:45.040 --> 0:05:48.400 and and continue through the cold winter. One thing that 0:05:48.480 --> 0:05:51.800 parents around the world are obsessing over and kids around 0:05:51.800 --> 0:05:53.960 the world are probably trying to ignore because it means 0:05:53.960 --> 0:05:56.720 the end of summer is reopening school, how you go 0:05:56.760 --> 0:05:59.640 about doing it, and the complications involved in it. And 0:06:00.240 --> 0:06:02.840 one thing that's come up again and again, Anita, especially 0:06:02.880 --> 0:06:04.760 when I look through some of these proposals that school 0:06:04.760 --> 0:06:07.880 districts are putting out, is schools are going forward with 0:06:07.920 --> 0:06:10.159 planning and then kind of assuming that teachers will go 0:06:10.200 --> 0:06:13.560 along with it, or then they'll bring it to the teachers. Obviously, 0:06:13.600 --> 0:06:15.919 the faculty has a lot to be concerned about. How 0:06:16.000 --> 0:06:19.920 scared should they be about potentially catching COVID through kids, 0:06:19.920 --> 0:06:24.440 through asymptomatic kids. What does the science tell us, Well, 0:06:24.440 --> 0:06:27.839 this is an area where we still have some blind 0:06:27.920 --> 0:06:32.560 spots in the science and much more UM research needs 0:06:32.600 --> 0:06:35.839 to be done to answer that question. UM. The the 0:06:35.880 --> 0:06:39.239 results of different studies around the world are are mixed 0:06:39.480 --> 0:06:44.320 UM and so in some studies have concluded that children 0:06:44.440 --> 0:06:47.520 play a less of a role in transmission as a 0:06:47.640 --> 0:06:52.240 virus than adults do UM. Other studies have shown that 0:06:52.360 --> 0:06:56.800 kids are as likely to transmit UM the virus as adults. UM. 0:06:56.880 --> 0:07:00.520 There are lots of different kinds of studies with lots 0:07:00.520 --> 0:07:05.280 of different protocols that have been used, so everyone is 0:07:05.800 --> 0:07:08.920 not sort of starting at the same point. So it's 0:07:09.000 --> 0:07:11.760 it's difficult to know. That's why we really need to 0:07:11.840 --> 0:07:15.320 be ready when schools do reopen, to be able to 0:07:15.400 --> 0:07:19.400 get on top of any clusters of cases, UM, and 0:07:19.480 --> 0:07:21.880 to track those and to figure out the chains of 0:07:21.960 --> 0:07:26.040 transmission so that we know whether children are the index case, 0:07:26.240 --> 0:07:28.600 you know, the first case to spread it to others 0:07:29.200 --> 0:07:31.840 or not. And um, and no one is really I 0:07:31.840 --> 0:07:35.640 mean teachers, UM are not going to feel comfortable, I think, 0:07:35.640 --> 0:07:40.560 being back in school unless they feel that transmission in 0:07:40.640 --> 0:07:43.840 the community is under control and the schools have a 0:07:43.920 --> 0:07:49.240 good plan for trying to reduce the risk. Anita, it's 0:07:49.240 --> 0:07:51.240 impossible to tell the future, but I'm gonna ask you 0:07:51.320 --> 0:07:54.760 too anyway, UM, what's the most likely scenario you think 0:07:54.800 --> 0:07:57.480 for a school district that that opens. Is it going 0:07:57.520 --> 0:08:01.800 to be sort of start stop, hype red schools closing, 0:08:01.800 --> 0:08:04.240 schools upening, Like, what do you think is most likely 0:08:04.280 --> 0:08:07.360 to happen in a market like New York or or 0:08:07.400 --> 0:08:12.160 Washington where you are well in New York? And it's 0:08:12.200 --> 0:08:15.280 hard to say. And I think that some public schools 0:08:15.320 --> 0:08:19.360 may make different choices than private schools do. Again, it's 0:08:19.360 --> 0:08:22.200 going to it should depend very much on the numbers 0:08:22.320 --> 0:08:26.080 at that time. I think that um DC and New 0:08:26.160 --> 0:08:29.760 York are both UM lucky if you can call it that, 0:08:29.920 --> 0:08:31.720 or through a lot of hard work, they have built 0:08:31.800 --> 0:08:35.960 up a contact tracing workforce UM that is really helpful 0:08:36.080 --> 0:08:39.240 so that they can be deployed when there are outbreak 0:08:39.360 --> 0:08:43.040 breaks to be able to track the transmission UM. I 0:08:43.240 --> 0:08:47.040 think probably you know, the two most likely scenarios are 0:08:47.160 --> 0:08:51.199 a hybrid approach or starting the school year with online 0:08:51.280 --> 0:08:54.880 learning UM and then trying to transition into a hybrid 0:08:54.880 --> 0:08:58.040 approach before the end of before the end of the 0:08:58.120 --> 0:09:03.200 calendar year. Yeah, that means a lot of uncertain parenting too, 0:09:03.240 --> 0:09:05.560 because they can't go back to work very quickly. Here Anita, 0:09:05.720 --> 0:09:08.560 do you think we need another mass lockdown? Jason, I 0:09:08.600 --> 0:09:11.040 discussed how if we had done it the right the 0:09:11.080 --> 0:09:13.280 first time and we were patient enough the first time, 0:09:13.440 --> 0:09:15.480 we'd be in a very different place. Now, of course, 0:09:15.720 --> 0:09:18.679 we now have outbreaks locally all over the place. Can 0:09:18.760 --> 0:09:21.600 we muddle through the next school year with localized shutdown 0:09:21.679 --> 0:09:25.280 or do we need something bigger? Well, there's been a 0:09:25.280 --> 0:09:27.920 lot of discussion about what we don't want, which is 0:09:28.040 --> 0:09:31.199 going back to a full on shutdown that we lived 0:09:31.200 --> 0:09:34.160 through in the spring. UM. But I think, you know, 0:09:34.240 --> 0:09:37.480 we have to think more about what what do we want? UM? 0:09:37.480 --> 0:09:40.400 What do what do we want our October November December 0:09:40.440 --> 0:09:43.440 to look like? UM? And I think that people there 0:09:43.480 --> 0:09:45.560 would all come together and though that we want to 0:09:45.600 --> 0:09:47.839 have more freedom. We want our children to be back 0:09:47.880 --> 0:09:50.600 in school, we want parents to be able to go 0:09:50.720 --> 0:09:53.840 back to work. And so I think that what we 0:09:53.880 --> 0:09:56.679 need to do to get there UM, in light of 0:09:56.720 --> 0:09:59.880 the number of high number of cases in the hospitalizations 0:09:59.880 --> 0:10:04.000 to cross the country is to really encourage physical distancing 0:10:04.040 --> 0:10:08.400 and Matthew's limit large indoor gatherings UM. And then in 0:10:08.520 --> 0:10:12.280 some areas with exponential growth of cases, we need to 0:10:12.400 --> 0:10:16.120 close high risk activities where you know, in places where 0:10:16.120 --> 0:10:19.200 the outbreak is worsening, so things like bars and indoor 0:10:19.320 --> 0:10:23.520 entertainment venues and large indoor restaurants. And we don't need 0:10:23.559 --> 0:10:27.280 to go full on all shelter in place, UM, but 0:10:27.480 --> 0:10:31.000 we we can close some of the high risk places UM. 0:10:31.040 --> 0:10:34.080 That would really help to reduce the cases. All right, 0:10:34.480 --> 0:10:35.840 So good to get some time with you and need 0:10:35.880 --> 0:10:38.800 assist for a deputy director for Johns Hopkins Center for 0:10:39.080 --> 0:10:42.480 Health Security. She joined us from Washington, d C. Well, 0:10:42.559 --> 0:10:44.840 this is a story that everyone's excited about. I have 0:10:44.960 --> 0:10:47.040 to say, I just couldn't wait to get into this 0:10:47.640 --> 0:10:51.280 with this gang. Chris Paul Mary wrote the story, It's 0:10:51.400 --> 0:10:55.720 canceled college sports games could cause ESPN millions. He's our 0:10:55.960 --> 0:10:59.040 l A bureau chief, my fellow chief out on the 0:10:59.080 --> 0:11:02.120 West Coast. He joins us from the City of Angels. 0:11:02.200 --> 0:11:05.120 Joel Webber, the editor of Bloomberg Business Week. He joins 0:11:05.160 --> 0:11:08.840 us from Massachusetts. And Joel, I mean, I just wanted 0:11:08.880 --> 0:11:11.400 to sink my teeth into this. I've been obsessively thinking 0:11:11.440 --> 0:11:15.360 about this, just in the sense of the economic implications 0:11:15.400 --> 0:11:19.200 of no sports. And as you have said many times, 0:11:19.240 --> 0:11:23.040 every story is a business story. Yeah, and it's especially 0:11:23.040 --> 0:11:26.400 true for sports right now. And you know, look like 0:11:26.640 --> 0:11:29.000 we we all are suddenly living in this world where 0:11:29.040 --> 0:11:33.120 we're craving, or at least I'm craving sports content. Um, 0:11:33.160 --> 0:11:36.640 and baseball got going. Um might see a false start there, 0:11:36.679 --> 0:11:41.040 We're about to see NBA start today. Uh. But what 0:11:41.160 --> 0:11:44.000 Chris Palm Mary did such a great job with this story. 0:11:44.200 --> 0:11:46.959 It really just looks at the worldwide leader that being 0:11:47.200 --> 0:11:50.880 ESPN in the sports world. And what it really reveals 0:11:51.040 --> 0:11:56.800 is how important college football is for ESPN's bottom line. 0:11:56.920 --> 0:12:00.280 And college football seems to be really in flux right 0:12:00.320 --> 0:12:03.600 now and and that might have big implications only for ESPN, 0:12:03.600 --> 0:12:06.760 but obviously its parent company Disney. Um Chris, what were 0:12:06.760 --> 0:12:10.720 you able to find out? He's obviously esp and huge 0:12:10.720 --> 0:12:13.160 in sports, but I just didn't realize how big in 0:12:13.200 --> 0:12:16.200 particular college They took a big bed about ten years 0:12:16.200 --> 0:12:19.839 ago to try to get as many of these conferences exclusively. 0:12:19.920 --> 0:12:23.760 So they launched these networks, ACC Network, at the SEC Network, 0:12:24.200 --> 0:12:28.800 Longhorn Network. Last year, more than half of all college 0:12:28.800 --> 0:12:32.360 football viewing was done on one of these ESPN outlets, 0:12:32.240 --> 0:12:35.719 and streaming service ESPN Plus has it. Obviously they run 0:12:35.760 --> 0:12:39.840 games on ABC as well, College Game Day hugely important 0:12:39.920 --> 0:12:43.559 full hot of American Saturday mornings. Uh. So you know, 0:12:43.640 --> 0:12:46.040 this is a big business for them, billion dollar business 0:12:46.200 --> 0:12:49.080 and uh and it's totally up in the air. I 0:12:49.160 --> 0:12:50.960 just can't believe that there are ten different channels for 0:12:51.000 --> 0:12:54.280 college games at ESPN. That that just it's stunning. I mean, 0:12:54.600 --> 0:12:58.840 I've actually watched cable television yesterday. That's several page downs 0:12:59.080 --> 0:13:02.800 on under remote control. UM. I also watched hockey last 0:13:02.880 --> 0:13:06.679 night on cable, which was really surreal. UM. You know, 0:13:06.720 --> 0:13:09.839 they're they're piped in fan noises and everything. One thing 0:13:09.880 --> 0:13:13.000 that struck me though is hockey basketball. They're they're doing 0:13:13.000 --> 0:13:15.960 the whole bubble thing, right, UM, college sports, can you 0:13:16.120 --> 0:13:18.880 can you do a bubble? And if you can't, UM, 0:13:19.200 --> 0:13:21.760 even no, let's just go with the idea that you could. 0:13:22.400 --> 0:13:25.560 There isn't one commissioner, is there. There isn't one league 0:13:25.640 --> 0:13:27.839 that can set the rules. It's kind of like all 0:13:27.840 --> 0:13:31.480 these different leagues, different conferences setting their own rules. The 0:13:31.679 --> 0:13:35.920 big difference between that and professional sports. UM. And one 0:13:35.920 --> 0:13:37.800 of the things to your point that we're starting to 0:13:37.800 --> 0:13:39.880 see and we'll see if this continues to be the trend, 0:13:40.280 --> 0:13:43.440 but the professional sports that have played in that bubble 0:13:43.480 --> 0:13:46.719 in Orlando, the NBA and Major League Soccer seemed to 0:13:46.760 --> 0:13:50.680 be having less trouble than Major League Baseball, which is 0:13:50.760 --> 0:13:54.680 out on the road. And UM College has been trying 0:13:54.720 --> 0:13:57.440 to adapt sort of a hybrid model. They've a few 0:13:57.480 --> 0:14:00.960 of the conferences have reduced their way teams essentially, they're 0:14:01.000 --> 0:14:04.080 only gonna play teams in their conference. Maybe one other game, 0:14:05.320 --> 0:14:09.160 but that still involves travel, and so uh it's it's 0:14:09.400 --> 0:14:10.839 we're mains be seen. I think it's could be a 0:14:10.880 --> 0:14:13.959 lot more pressure for the colleges if uh so these 0:14:13.960 --> 0:14:17.600 players start to test positive parents who involved, it's going 0:14:17.640 --> 0:14:21.280 to be, you know, a tug of war. Uh So. 0:14:21.400 --> 0:14:25.280 Disclosure that I'm a former ESPN employee here, but one 0:14:25.320 --> 0:14:29.720 thing that um, you know, ESPN has really been able 0:14:29.800 --> 0:14:33.680 to to use to its advantage is this lucrative uh 0:14:33.840 --> 0:14:37.440 to stream business model where it makes money not only 0:14:37.520 --> 0:14:42.560 from advertisers and it's especially lucrative demographic, but then they 0:14:42.600 --> 0:14:46.600 also make money via the cable providers. And Chris, I 0:14:46.640 --> 0:14:48.720 think one of the things that you hit on on 0:14:48.800 --> 0:14:52.760 in your reporting here is both the advertising as well 0:14:52.840 --> 0:14:57.040 as the cable revenue is is that is ultimately at 0:14:57.120 --> 0:15:00.840 risk here and and so beIN a picture like exactly 0:15:00.880 --> 0:15:03.680 how much money we're talking about here, um, and how 0:15:04.720 --> 0:15:10.200 ESPN is attempting to navigate the moment. Well, the advertising 0:15:10.280 --> 0:15:12.840 is the biggest immediate head because you cancel the game 0:15:12.880 --> 0:15:15.600 and then you had some mad spaces that were sold. 0:15:15.840 --> 0:15:18.720 That's about the roughly three billion in revenues for the 0:15:18.960 --> 0:15:22.640 ESPN Empire. But you said, the bigger number is this 0:15:22.920 --> 0:15:25.640 ten billion year in fees that come in from everybody 0:15:25.680 --> 0:15:29.200 paying their their cable bill every month. You know, that's 0:15:29.200 --> 0:15:33.440 a longer term. It's it's sticky. But there were some 0:15:33.480 --> 0:15:37.800 news today. Comcast just said they are going to refund 0:15:38.440 --> 0:15:43.520 people's monthly bills for their regional sports networks. Uh. You 0:15:43.560 --> 0:15:46.960 know these are Chicago, Philly, um, you know local channels, 0:15:46.960 --> 0:15:50.160 the broadcast and particularly the baseball games because their season 0:15:50.200 --> 0:15:53.000 has been cut so dramatically, and so this is this 0:15:53.120 --> 0:15:55.560 has been been following the story for months. What's how 0:15:55.680 --> 0:15:59.480 is this sort of model, the ecosystems, as people call it, 0:15:59.720 --> 0:16:01.680 going into the hold or is it going to break? 0:16:01.720 --> 0:16:05.600 You know, people playing their cable you know, the cable 0:16:05.640 --> 0:16:08.400 companies pay their networks, and the networks play pay the league. 0:16:08.440 --> 0:16:11.240 Nobody wants to upset that wonderful little system that they've got, 0:16:11.680 --> 0:16:16.440 but after months without sports, it's starting to crack. Well, 0:16:16.480 --> 0:16:18.640 and Chris, you went exactly where I was going to 0:16:18.720 --> 0:16:20.400 go next. And it's a very personal thing. I'm a 0:16:20.480 --> 0:16:22.640 huge college football fan. I grew up in the South. 0:16:22.680 --> 0:16:25.800 I love SEC football. I tuned into the SEC network 0:16:26.120 --> 0:16:30.720 all fall. But I have to say college football is 0:16:30.760 --> 0:16:33.560 one of the only reasons we still have cable at 0:16:33.600 --> 0:16:36.080 this point. And it sounds like, based on your reporting 0:16:36.080 --> 0:16:38.920 the kicker to the to your story, I'm not alone 0:16:39.120 --> 0:16:41.800 in hanging onto that and not hanging onto it if 0:16:41.840 --> 0:16:45.120 there's no college football. Well, you know, everyone's been thinking 0:16:45.160 --> 0:16:48.480 about their spending on cable because of Netflix and all 0:16:48.520 --> 0:16:51.920 the other wonderful screaming sources. Ub Security did a survey. 0:16:51.920 --> 0:16:56.680 They said there's customers who cancel the cable if there 0:16:56.760 --> 0:16:59.200 was no college football. So you know, that's a pretty 0:16:59.240 --> 0:17:00.960 big hit in the broad with that. For the for 0:17:01.040 --> 0:17:03.840 the networks is you know, you cancel and then that's 0:17:04.520 --> 0:17:07.600 you're done, right. It's not like an advocates canceled, Right, 0:17:07.800 --> 0:17:11.680 You've lost the subscriber for for years and uh so 0:17:11.760 --> 0:17:14.720 that's you know, what we've seen in covid is there 0:17:14.760 --> 0:17:18.280 have been ongoing trends pressure on a gable bundle and 0:17:18.280 --> 0:17:22.960 and this has really accelerated these trends, so huge surgeon 0:17:23.280 --> 0:17:27.720 people watching streaming and hire much stronger cuts in in 0:17:27.800 --> 0:17:31.840 the PayTV customers. Alright, we're gonna leave it there. It's 0:17:31.840 --> 0:17:35.680 a terrific story. I know scartand I both just devoured 0:17:35.680 --> 0:17:38.040 it when we saw it come across this morning. Chris 0:17:38.040 --> 0:17:40.920 Palm Mary wrote it the story canceled college sports games 0:17:40.960 --> 0:17:44.800 could cost ESPN millions. It's online on the Bloomberg right now. 0:17:44.840 --> 0:17:47.840 It'll be in the new issue of Bloomberg Business Week 0:17:48.000 --> 0:17:50.800 magazine coming out later this week. Our thanks to Chris 0:17:50.840 --> 0:17:53.960 as well as to Joe Webber, the editor of the magazine. 0:17:54.440 --> 0:17:58.080 This is Bloomberg Business Week with Carol Masser and Jason 0:17:58.160 --> 0:18:01.880 Kelly on Bloomberg. Brady, all right, let's talk a little 0:18:01.920 --> 0:18:06.159 business week economics and continue our series that we inadvertently 0:18:06.160 --> 0:18:09.320 are doing. Today's Scarlett talking with people who ask questions 0:18:09.359 --> 0:18:12.960 of J. Paul yesterday from Bloomberg. A lot of them, 0:18:13.200 --> 0:18:14.600 There are a lot of them. We are happy to 0:18:14.640 --> 0:18:18.119 be joined by Katarina Surviva, Federal Reserve and economics reporter 0:18:18.320 --> 0:18:23.159 for Bloomberg. Joinus on the phone from Houston, and Katerina, 0:18:23.520 --> 0:18:26.040 great to talk to you. I know it's a busy week. 0:18:26.600 --> 0:18:29.960 Uh talk to us about what we heard, didn't hear 0:18:30.560 --> 0:18:36.000 and the reaction by investors to J. Pall yesterday. Hi, 0:18:36.359 --> 0:18:39.440 thanks so much for having me on. Um. Yeah, so 0:18:39.480 --> 0:18:42.280 it was you know, it was a press conference and 0:18:42.400 --> 0:18:45.800 a Fed meeting that UM in some respects was what 0:18:45.880 --> 0:18:49.879 people were expecting. You know, there was not much news 0:18:50.280 --> 0:18:52.919 in terms of new policy action that came from it. 0:18:53.000 --> 0:18:57.240 They of course left weights unchanged and pledged their support 0:18:57.840 --> 0:19:01.800 for the economy as we continue through the crisis. UM. 0:19:01.840 --> 0:19:05.560 But I do think you heard, especially in the press conference, UM, 0:19:05.640 --> 0:19:11.080 some more kind of UM somber notes on the economy. UM. 0:19:11.119 --> 0:19:14.760 Of course, we saw today's second quarter GDP print UM 0:19:14.840 --> 0:19:18.879 kind of show the length of what we're looking at, 0:19:19.520 --> 0:19:22.000 UM in terms of the crisis. So you heard that 0:19:22.119 --> 0:19:25.360 from Jaire Powell that yesterday. And you also heard him 0:19:25.800 --> 0:19:29.840 UM talk about fiscal action UM, which which is you know, 0:19:29.960 --> 0:19:34.280 timely as Congress debates the next round of stimulus. UM. 0:19:34.320 --> 0:19:36.919 So you heard him kind of point point to that 0:19:37.119 --> 0:19:41.280 as UM as possibly you know, calling out his colleagues 0:19:41.320 --> 0:19:44.880 there to to perhaps do more right. And we expected 0:19:44.920 --> 0:19:47.480 him to do that. That's been something he's been pounding 0:19:47.480 --> 0:19:49.679 the table on, or in his case, gently tapping the 0:19:49.680 --> 0:19:52.400 table on for a couple of meetings. Now j Pal 0:19:52.480 --> 0:19:54.960 doesn't pound the table. He's much more nuanced than that. 0:19:55.600 --> 0:19:58.000 One thing that I noticed was there's a note from 0:19:58.080 --> 0:20:01.439 that West indicating that they believe said will delay a 0:20:01.480 --> 0:20:04.840 pivot to ford In for guidance till November. So the 0:20:05.000 --> 0:20:07.120 thinking was that this would be a wait and see 0:20:07.200 --> 0:20:09.879 kind of meeting and there be some action to be 0:20:09.920 --> 0:20:13.560 announced in September. But if not West is correct, they 0:20:13.640 --> 0:20:17.920 might push that off until November. Why is there Why 0:20:17.960 --> 0:20:20.560 do you think there is this pressure to come up 0:20:20.600 --> 0:20:25.080 with something by September? Yeah, I mean I think some 0:20:25.240 --> 0:20:27.560 of it might just be that it's kind of the 0:20:27.640 --> 0:20:32.240 what next attitude? Um. I think it's some of that. Um. 0:20:32.280 --> 0:20:34.240 You know, we of course had a lot of activity 0:20:34.320 --> 0:20:36.600 from the Fed in the spring. Um, there's been a 0:20:36.640 --> 0:20:38.320 bit of a lull as to kind of wait and 0:20:38.320 --> 0:20:41.480 see what happens with the economy. So I wonder if 0:20:41.560 --> 0:20:44.240 if investors are kind of eager to see, um, what 0:20:44.440 --> 0:20:47.320 more the central Bank can do. And also, I mean 0:20:47.640 --> 0:20:50.480 that would come at a time when you know, we're 0:20:50.480 --> 0:20:54.600 seeing this resurgence in the virus this summer, so perhaps 0:20:54.640 --> 0:20:58.560 by September we may very well need something else. UM. 0:20:59.440 --> 0:21:04.080 I think that's why we're seeing some pressure from some investors. UM. 0:21:04.119 --> 0:21:06.359 I think the call to to maybe see that delayed 0:21:06.400 --> 0:21:09.800 until November, you know, also makes sense. I think it's 0:21:09.840 --> 0:21:12.359 just it's tough. I think it's really kind of week 0:21:12.400 --> 0:21:15.000 by week at this point in terms of what's going 0:21:15.040 --> 0:21:18.560 on with the economy. And so tell us how the 0:21:18.600 --> 0:21:23.480 economy looks, Katerina from your perspective being there in Houston. 0:21:23.520 --> 0:21:25.080 I know I asked this question every time we talked 0:21:25.080 --> 0:21:27.760 to you, but I am fascinated by this idea that 0:21:27.840 --> 0:21:30.880 you have this view from all your colleagues and from 0:21:30.880 --> 0:21:33.760 all your great work covering the FED. But you're also 0:21:33.800 --> 0:21:36.639 in Houston, so you're talking to people locally and regionally, 0:21:36.720 --> 0:21:40.160 and we know from talking to folks across the country, 0:21:40.240 --> 0:21:43.160 this is a very different economy and a very different 0:21:43.280 --> 0:21:46.320 feel around the virus and the recovery, if there is 0:21:46.359 --> 0:21:51.879 such a thing right now, depending on where you're sitting, Yeah, absolutely, 0:21:51.960 --> 0:21:54.560 I mean the resurgence that we've seen here, it's just 0:21:54.720 --> 0:21:58.040 it's incredible because of course, you know, like everyone else 0:21:58.160 --> 0:22:01.400 or most of everyone else, Texas locked down in April, 0:22:01.880 --> 0:22:04.080 and at that point, you know, we really didn't have, 0:22:04.560 --> 0:22:07.720 um the caseload that you know, you guys had in 0:22:08.000 --> 0:22:11.960 the New York area. UM. So it's it's been interesting 0:22:12.000 --> 0:22:14.320 because we were locked down, we opened up, you know, 0:22:14.400 --> 0:22:17.360 fairly early in May, and then of course mid till 0:22:17.440 --> 0:22:20.119 late June we had this resurgence. So you know, we 0:22:20.200 --> 0:22:24.159 feel like we've been locked down here for many months 0:22:24.160 --> 0:22:27.040 and there's just been no let up. I think that's 0:22:27.040 --> 0:22:31.800 that's that businesses here having a really hard time with that. Um. 0:22:31.840 --> 0:22:35.280 I think you kind of, you know something, some bigger 0:22:35.359 --> 0:22:40.680 businesses that probably cater um to a more national clientele, um, 0:22:40.720 --> 0:22:44.080 like manufacturing firms here in Texas have seen a bit 0:22:44.119 --> 0:22:46.840 of business and demand come back where we're seeing that. 0:22:47.400 --> 0:22:50.840 But I think beyond the ground mom and pop places 0:22:50.880 --> 0:22:53.879 you know, are not I mean our our local restaurants 0:22:53.880 --> 0:22:56.080