This is Bloomberg business Week inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.
Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week. This past week we saw the Federal Reserve hold rates in place for a third straight time, with Chairman Jerome Powell indicating that policy easing is at least on the table as we head into twenty twenty four, with US
inflation slowly creeping downward. We're going to take a look at the health of the American consumer from a few different angles, including with PNC's annual Christmas Price Index, mobile sports betting, with the CEO of fandual parent flutter, and expectations for the newest hotel addition to the Las Vegas Strip.
All of that to come. We begin with someone who loves to gamble on himself, the one and only Elon Musk, the world's richest man, and his various companies making news on not one, not two, but three fronts this week. That includes the biggest ever recall for electric vehicle giant Tesla. The National Highway Traffic Safety Administration determined that the driver assistance system autopilot that comes standard in Tesla's vehicles doesn't do enough to guard against misuse. That prompted a recall
of more than two million cars. Bloomberg Market Senior editor Mike Reagan and I cut up with the Bloomberg Technology co host ed Ludlow to find out more.
It is a recall as a technicality or in the technical sense to recall in name only. But what Nitzer found, which is the main kind of highway safety regulator, is that there aren't enough kind of visual prompts on the display screen of a Tesla, on the dash screen as well as the main monitor to remind the driver to keep their hands on the wheel and their eyes on the road. That might seem obvious to you, But it's not a hard recall, like Tesla doesn't have to take
back any of the cars. It has to address Knitz's concerns with the with an over the air update, which is doing voluntarily with objection based on what nits are told it. And it's so important to be absolutely clear here we're talking about autopilot which has been standard on all Tesla cars since twenty fifteen. We are not talking about full self driving beta, which is kind of the next level up, something nearer to autonomous driving technology.
Well, I do wonder, you know when they do a recall like this, and it's a great point. I think that we're not talking about having the supply parts and labor. Really it's some software code update. Does this still cost Tesla anything material you know to do this or is it just tweak a few lines of code and they're done with it.
Can you assign a value to the pr behind it? Yeah, I mean you know that it is a recall on a technical basis. And today the headlines where two million vehicles recall the biggest US recall recall for Tesla. Ever, there are only two million Teslas on the road anyway, so it's basically all of them. And as Tim pointed out before the start of the segment, the stock did recover, but at a session low. I think we were down
three percent, and so there's that impact. But in terms of the cost of addressing or fixing the issue, it's negligible. That said, the experience of lots of Tesla owners that I've spoken to today hasn't been that smooth. It is supposed to be as simple as pressing the touchscreen running the update, but sometimes that can be problematic for a small part of the customer base.
And there are a few certain things in life that we just can count on each and every lifetime, or each and every year. One of them is death fed meetings, fed meetings, taxes, and that full self driving is going to come this year. Right, That's something that Elon Musk says every single year, and he's been saying it every
single year. And here we are, right in twenty twenty three years after he first said it without a fleet of rubber taxis when as I walk out in seven thirty one Mixington Aft this evening, right, how does this play into the idea that, you know, the world that Elon Musk wants is one where we're not actually behind the wheel in the sense of driving a tesla.
I apologize profusely for interrupting, because your credit it's just spot on that every year, every month, Elon Musk makes prediction that that often does come true, just not on the timeline that he sets out. So the recall today was not to do with full self driving Beta. It was to do with the most basic driver assistance tool, But we do care about full self driving Beta, which is a software suite that allows the car to drive
itself to all intents and purposes. But legally speaking, if you read the small print on Tesla's website, it says the car is not capable of driving itself. It still requires the driver to have their hands on the wheel and their eyes on the road, because those are the laws of the land, at least in this nation and
in many other jurisdictions. The future is one where Tesla plans to sell a much lower price point, mass market vehicle to build up the number of Teslas around the world in that time based on the Tesla vehicles on the roads today and that future model which will grow the volume of Teslas out there. They're using the software to gather data to train the neural nets behind their autonomous technology, with the end goal being and everyone forgets this,
but MUSC has spoken about it so many times. The end goal is where Tesla operates a fleet of vehicles that drive themselves right and takes back ownership of those models in the future. But that what I just outlined is the arc of what Tesla plans to do to get there. The problem is that that is real world testing on roads with other traffic and other road users, and that is the risk that the regulators are concerned about.
And it's very early days for the cyber truck. But I wonder what you're hearing, is is it going well or is it being received well by the first batch of customers to receive one?
Yeah you know, yeah, yeah.
I mean from the customers that received one that I was spoking to, they're absolutely delighted. But those customers are part of a very clear demographic of high network individuals who have very high spec versions, and we're talking just
a handful at this stage. The big shock was that when they did the big unveil last week or the week before, the lowest price point cyber truck was sixty one thousand dollars twenty thousand dollars more expensive than when they first announced it in twenty nineteen, and that lowest cost variant is not going to be available until twenty twenty five. So it's very much targeting the early adopter
or first adopter market right now. It's an incredibly expensive product, and we expect the ramp of their output to be really slow.
And I said, there's a few stuff that a few things that I want to get to. We got a couple more. One is this story that crossed by Sophie Alexander and Dana Hall about Ewon Musk planning and new university in Austin with one hundred million dollar gifts. So he's got Neuralink, he's got x, he's got x dot AI, he's got the Boring Company, he's got Tesla, he's got space X and now he's got a university too.
Yes, and this is a philanthropic effort, so it's different from his business lines. Dana Hole and Sophie Alexander reported this because they got hold of the irs application that Musk had made for tax exemption. So he plans to make a one hundred million dollar gift to set up a university in Austin in competition to all the other universities that are popping up in Austin right now, initially
focused on STEM subjects, but then broadening it out. And you know, Elon Musk does regularly conduct philanthropic donations and exercises. He has previously set up a school which in the first instance many years ago was for his children. It kind of k through whatever level, and now he wants to focus on academia and the highest level of education. It's a fantastic report by my colleagues.
You know, ed, I feel like whenever the name Elon Musk comes up, there's about twelve different stories floating around. He's moving in so many different directions. But obviously the other big one lately is SpaceX and this opportunity for insiders to sell some of their equity in the company. Talk us through how that's going, what we know about it.
Yes, the latest that I reported last night with my colleagues Katie Ruth and Lauren Graush is that there was so much demand to buy shares in this tender that they actually up the price a little bit. So when we reported it last week, it was ninety five dollars a share. These are employees selling their shares to outside investors, and the price has now been uped by just two dollars to ninety seven dollars per share. But based on the volume of shares they pan to sell around five
hundred to seven hundred and fifty million dollars. That would give SpaceX evaluation of about one hundred and eighty billion. The last round that it did in the summer valued it at one hundred and fifty billion, So this is a big jump. You know, SpaceX is the clear most valuable US startup. It's the second most valuable private company
globally behind byte Dance. And these are big numbers for a company that I've reported is on track for revenues of between nine and ten billion dollars this year, maybe fifteen billion dollars next year. But the valuations I watering and investors are just clamoring to find a way to invest in SpaceX.
And give us the details said about a potential IPO, not just of SpaceX as a whole, but potentially spinning off Starlink as an IPO in the last minute that we have with you.
Yeah, this is part of the logic, right, So it's important. These are employees selling shares. They work there a long time, they want some liquidity for the reward of working free long musk. But the opportunity for investors is to get in before it's too late. Because we've reported at the end of twenty twenty four, beginning of twenty twenty five, must says more like twenty twenty six, they could spin off Starlink in an IPO, which would be a big
market and investor event. And if you're already sitting on the cat table, then you're well positioned for that big moment, if and when it comes.
So make a prediction what happens first, full self driving or a SPACEXIPO.
I am not in the market of predictions, but based on what Elon Musk has said slash what we've reported, I think a Starling spinoffs more likely.
That was Bloomberg Technology co host at Ludlow, Mike Reagan. We'll be back with us later this hour and for more on the latest goings on with Elon Musk, check out our newest Bloomberg podcast series, Elon Inc. Coming up, our magazine team explains why one of Sam Bankman Freed's high profile lawyers says the jailed cryptomogul was the worst witness he's ever put on the stand, a key element you may have missed from the FTX trial. Next, you're listening to Bloomberg BusinessWeek. This is Bloomberg.
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The fallen crypto mogul Sam Bankman Fried right now is in Brooklyn's Metropolitan Attention Center, where he's awaiting sentencing this coming March. This after a jury last month found him guilty of stealing billions of dollars from FTX customers. Much of the coverage of his trial focused on the main characters, SBF, of course, and then three powerful prosecution witnesses, Alameda CEO Caroline Ellison, FTX co founder Gary Wong, and FTX engineering
chief Nishad Singh Reminder. All three testified that bankmin Freed directed them to commit fraud. But what about SBF's lawyers, who, behind the scenes worked to represent him even if he wasn't exactly a model defendant. One of those lawyers is Stanford Law professor David Mills. He led the defense as a favor to SBF's parents, who are fellow professors at Stanford Law and at one time close friends of Mills.
Bloomberg News legal reporter Ava Benny Morrison writes about the defense attorney and the finance section of the new issue of Bloomberg Business Week. It's on newstands now, online at Bloomberg dot com, slash BusinessWeek, and of course on the
Bloomberg terminal. And to help us understand the fallout of a highly successful and wealthy lawyer taking on a case that he deemed unwinnable, Bloomberg News cross ass at reporter Emily GRIFFEO and I welcome Eva along with Bloomberg BusinessWeek editor Joel Weber.
David Mills was not a name that I was familiar with, never heard of it. We worked, you know, all over this trial. We all of us were glued to it, trying to you know, understand every turn of the screw. Mark Cohen, Christian Everdeale. Those were the two people who were basically on the stand defending SBF. So when the legal team reached out and said, hey, Ava's got this story about David Mills, who actually led the sort of the strategy for defending SBF, I was like, who tell
me everything? And it turned out she had a lot to say. How did this story find you? Ava?
The similar questions were being asked in the courtroom. To be honest, during his trial, David Mills would sort of come into the back of the room and sit down with the family and not next to SBF, not next to SBN. No, he's next to parents, yes exactly, And reporters would point at him and say, who is that guy? What is he doing? He's talking to the parents all the time. He's sort of sauntering up to the trial attorneys.
So I was interested in getting to know a bit more about him, And turns out he has had a very full and colorful life. He has been a white collar lawyer for a very long time decades. He's represented some really big characters on Wall Street and in Silicon Valley. But he's also a very successful investor. He works as a managing director at Fortress a bunch of other things, and you can tell from his interview he's also very very candid, which is unusual for a lawyer.
He's got a plan, he does. Yes, that was I was like, oh, just fly your own jet to the Bahamas to see SPF, which he.
Did right, yes, exactly when he went down there and agreed to represent him. And he wasn't willing to put a dollar figure on how much he's worth. But I think the jet, for example, gives you a little bit of an indication of what.
He is worth. So there's this photograph of him with a baseball hat. Three four hundred and nineteen is on the hat. What is that?
That is the number of people he has helped get out of prison. So he was instrumental in changing the three strikes law in California, which is quite controversial, had people doing life sentences on their third conviction, no matter how small the last conviction was. And he was really instrumental in being helping change that and getting a lot of people out of prison.
Emily, do you know how many Tima has on his baseball hat.
He's got a humble ten.
Okay, So awa like this did not go down probably as mister Mills would have wanted. I guess, like I mean, if he's so good at getting people up, this is one guy who did not get off. What does he have to say about the client?
He said he was very difficult and a very challenging client, and we could sort of tell that he would be like that. After his indictment. He was speaking really publicly about the case after the bankruptcy, which any lawyer would
tell his client not to do. He said that bankman Fred went off script essentially when he got on the witness stand, and it was Mills's idea to have this strategy where he would get up and say, yes, I said all these things that the prosecution is saying that I did, but I didn't mean to do anything wrong. And I was trying to save people's money and I was looking out for clients. But he certainly didn't do that.
I thought it was interesting that when SBR first reached out to Mills, it actually wasn't for legal advice. Can you talk a little bit about that phone call. Yes.
So, Mills and Sam's father, Joe Bankman, who's also a Stanford law professor, are very good mates. And when there was trouble for FTX and Alameda Research the Associated Crypto Fund in early November last year, Joe called him and said, we're having a run on the bank. You know what can I do? And Mills gave him a list of potential people who could call to try and fundraise to try and get FTX and Alimeter out of this hole.
Okay, so the parents were the ones that went to Mills and recruited his services in the first place. Where does that relationship stand now? On the other side of the trial, which obviously ended with FBF fairly discreceed.
Mills was pretty open in saying that there is a bit of tension there between him and his longtime friends Joe and Barbara. He said that he's concerned parents who don't believe that their child is guilty will look for someone to blame after a guilty verdict, and he is in their direct line of sight. We went to Joe and Barbara actually and asked them what they thought of this characterization, and they said, we love David Mills. We're so grateful for what he's done for us as well.
That really struck me that statement that you got from his parents, because it ran kind of counter to his own feelings. It was almost like, you know, he was concerned about the worst case scenario, and they kind of came out looking like, we understand that he, you know, did his best, and he was kind of dealt the cards that he was dealt with our son exactly.
I think I think Mills came across to me as a very open and honest person. And when I asked him, you know, do you feel like Barbara and Joe blame you for the outcome of this given you were steering the legal strategy. He did say, like, I don't know if our friendship will survive this, and it would be an incredible stressful experience for any friendship to go through.
Okay, so what's next for him back to the private jet, Well, he.
Has said that he doesn't want to do a criminal law anymore. After Sam bankman Fried's.
Is permanently stuck at three four hundred and eighteen.
Well that was the last count from last year, he tells me on the anniversary of the project. But I think he's still pretty focused on the nonprofit side of things, and he also works with Johnny Ive, the Apple chief designer, at his new design firm.
It's a really remarkable story. Again, Joel, a person whose name had not at all been on my radar, even though I followed the.
Case, and not exactly like a typical way that you hear an attorney, you know, kind of say like what he was dealing with, right, and it's like, you know, usually this is just like stoneface. But I think it's an interesting and look, it's an interesting tell. And look like you watched that trail, you knew this was a complicated defendant. And boy, there was some drummer there.
That was Bloomberg News Legal reporter Ava Benny Morrison. Joe Weber is sticking around for our next segment, and Emily Grafeo was going to rejoin us in the next hour. Still ahead on Bloomberg Business Week, it's a clash of the ETF titans, as global leader Black rocks slowly but surely losing ground to its less flat she competitor.
Vanguard enjoys a very very loyal investor base. You think about who they appeal to. It's financial advisors, it's retail investors, not yolo retail investors, but actual mom and pop as bogel Head, Yes, exactly, and those are very sticky assets, and that type of investor base, it tends to shovel in money to these funds in almost every market cycle.
Actually, when things get worse, they pile in exactly, Oh, great buying opportunity.
We're in Wi FI conscious advisors and retail investors are poised to crown in new ETF king. That story is next. This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business App, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa Play Bloomberg eleven thirty.
Back to the finance section of the magazine, we go for a headline that it may surprise you, the reign of Blackrock is coming to an end, at least when it comes to the seven point eight trillion dollar market
for US ETFs, which Blackrock has dominated for decades. To help us understand it, this surprising turn of events, and which rival is poised to unseat the world's largest dasset manager in the ETF arena, Mike Reagan and I spoke with Bloomberg News senior markets reporter Katie Greifeld and once again editor of Bloomberg Business Week, Joel Weber.
If you look at the trend line of how Vanguard has slowly, slowly, slowly risen and how Blackrock has slowly, slowly fallen, there will be an infection moment not too far away, right, Katie. We don't know when, we.
Don't know what.
It will probably happen, probably.
In the next eighteen to twenty four months. There are some nuances there which I'm sure we'll get into. But I mean, like Joel said, this is something that the industry has been watching and waiting for for probably a decade at this point. If you take a look at the chart of a lot of popcorn, a lot of popcorn, of popcorn, Yeah, we've been waiting for this one. But Vanguard has been increasing its share of the US ETF
market for twenty one straight years. Just amazing growth coming out of Valley Forge, Pennsylvania and Blackrock sleepy there, sleepy Yeah, a lot of trees, but Blackrock, I mean, Blackrock is still enormous. Let's just put that out there. Two point five trillion dollars in US ETF assets. But their share has been dropping and dropping. Right now, it's at the lowest in at least twenty years, thirty two point five percent,
Vanguard at twenty nine point five percent. That is the slimmest margin between these two.
What's up with that?
What's up with that? So there's a few things going on right now. Vanguard enjoys a very very loyal investor base. You think about who they appeal to, it's financial advisors, it's retail investors, not yolo, retail investors. But actual mom and pop bogal head, yes, exactly, and those are very sticky assets and that type of investor base. It tends to shovel in money to these funds in almost every market cycle.
Actually, when things get worse, they pile in exactly. Oh, great buying opportunity, we're in exactly.
So that's what they're going, that's what they're enjoying. They have a very loyal, sticky asset base. Whereas you think about these black rock funds, they're enormous, they're very liquid, and they're trading tools. I mean Wall Street uses these and Wall Street those flows are more volatile.
Well, I wanted to ask you about that, Katie. I too, hail from not far from Valley Forge, from Sleepy myself, so I can relate it. Always always been fascinated with Vanguard because the other reason is notoriously a cheapskate.
You know, I do not want to spend.
More on something right, right, you can tell.
But so I look at okay, the flagshipt ETFs of both companies, you know, and Vanguard point zero three.
Percent, three basis points, three.
Basis points for those following at home that speak on street language. So to me, it's amazing this hasn't Why has it taken so long? Like what makes the Blackrock funds competitive at a higher management fee than Vanguard.
Well, the thing is, I will say that Blackrock has been forced to sort of follow Vanguard's lead here. They've had to cut fees as well introduce their own very low fee products. You take a look at their S and P five hundred funds, the I shares one ticker IVV that also charges three basis points to match Vanguard's fee. But in terms of why, I mean, Blackrock has enjoyed this position at the top of the league table for
so long, since two thousand and six. They were an early mover here, and that's really powerful in the ETF market. That first to market advantage. You see it both on the issuer side and also when new products sets are introduced, when a new category is introduced, So that is in BlackRock's favor. Also, you think about some of their funds, I mean TLT, that is their long dated treasury ETF.
And you love TL. You love talking about TL.
I'm talking about TLT so much because it has been insane. The volume and the fund this year has been incredible. People are shoveling so much money into this ETF this year, even though.
I stock is TLT.
Kind of it kind of is like these these funds that are norm memes DOC, these funds that Blackrock have a lot of them, are just capital market instruments, and that's really powerful. That's why spy which charges nine basis points UH, which is the S and P five hundred tracking fund UH introduced by State Street. It's the oldest, it's the biggest, it's relatively expensive, but it's just been around for so long that's what people use.
One thing that Blackrock has that Vanguard does not have, tell me, is a filing for a bitcoin ETF.
I was wondering we would get that.
Well, we're here now. Everyone's favorite thing to talk about in.
The people's favorite thing to talk about it in this room.
So if you haven't been following closely, they're there is no spot bitcoin ETF. But there's something like what thirteen filings something like that, something I lost track. Vanguard is not one of them. So what's gonna happen if Blackrock has a moment here where they get to have a bitcoin ETF and Vanguard doesn't have one.
This is so fun. I'm so glad we're talking about this because it sort of gets into the spiritual differences between Blackrock and Vanguard. Blackrock has over four hundred ETFs. That is a lot of ETFs and virtually every single asset.
More than anybody else pretty much.
You take a look at Vanguard, even though there's only two hundred three hundred billion dollars that separates them in AUM, Vanguard only has eighty three funds. Vanguard is not They don't even have a commodities ETF. So they're very plain vanilla.
By plain vanilla. It's like hold the vanilla bean, just like straight vanella.
Yeah, exactly, exactly. And I asked Vanguard, will you ever file for a spot bitcoin ETF? And usually it's hard to get Vanguard to say anything too fired up. They said absolutely, they have no intent to do this. The case for cryptocurrency is very weak, high volatility, et cetera. Whereas black Rock they are leading the charge.
Here.
A lot of people watching January to see if that spot bitcoin ETF gets approved, and if it does, that can give them a leg up.
Joel used to send me down to Vanguard to interview Jack Bogel what so probably ten years ago at this point. Yeah, Bogel never wanted to have an ETF in the first place.
You know.
You you'd ask them about ETFs and the the argument was, well, you can trade it all day, and he'd be like, why the heck would you want to do that? So exactly, So I wonder is it sort of the ghost of Bogel that's influencing Vanguard or is it more to do with just the structure. You know, black Rock is a for profit company. It has its own stock, it has its own shareholders to answer to. Vanguard's a completely different
business model. So when you talk to us about that, and does that play a role in their decisions on things like this.
Is partly the Bogel effect here to name check a book by Ye.
I don't know if you know him. We host the podcast together.
He's actually he's not quoted in this story though, Eric, I mean that would be.
Too do that.
But yeah, I mean you think about again Bogel's choice words. He to your point, Vanguard doesn't say anything too uh, it's hard to rile them up. Bogel definitely was more outspoken, but yeah, he didn't have a lot of love for commodities. It makes sense that Vanguard doesn't have a lot of love for crypto. Again, to go back to the quote that they gave me, they say that most crypto assets they lack intrinsic economic value. They generate no cash flows.
That is a biggie for Vanguard. It's the same thing with commodities not generating any cash flows. Just it's totally out of their profile that they would even venture into crypto.
It seems like Blackrock might be worried about this, like you've seen this lead continue to sort of slip away. It goes back to obviously Blackrock acquired Eye Shares and that was like this amazing acquisition. Do you get a sense that BlackRock's nervous about this, about the moment that they become sort of like the number two in the ETF game.
I will say that Blackrock is pretty competitive in spirit, and I think it's also to point out here, even though their share is slipping, it's a case of the pie is just getting bigger.
The pie is getting much bigger, right, Yeah, much bigger. Hece the podcast named Trillions Trillion, It grows a lot.
Yeah, we're up to seven point eight trillion dollars in US ETF assets about ten trillion dollars globally. You take a look at Blackrocks US ETF assets, They're at two point five trillion dollars. That's an all time high. So it's not like Blackrock is shrinking here. It's just that you have this just very formidable challenger in Vanguard, and
also you have all of the others. I mean, you take a look at the percent of flows that are going to people outside of Blackrock, out side of Van Garden, it's at a record high.
Our thanks to Bloomberg News Senior markets reporter Katie Greifeld, BusinessWeek editor Joe Weber, and our own Mike Reagan, find Katie's story on Vanguard's rise in the latest issue of the magazine. It's on newsstands now, on the Bloomberg terminal and online at Bloomberg dot com slash BusinessWeek. You're listening to Bloomberg BusinessWeek. Up next, researchers have found yet another potential benefit in weight loss drugs like we Go VI.
We're gonna tell you what it is and why drug makers are reluctant to actually lend support when we come back. This is Bloomberg.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen.
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Unless you've been living under a rock, then you're familiar with the so called the weight loss drugs we go, vio zempic zep Bound, and monjuro. The weight loss benefits have been well documented, but now researchers are pushing this class drugs that became famous for helping people lose weight and testing the shots across a spectrum of disorders from Alzheimer's disease to sleep apnea. We've talked about this. They're
also testing it out on alcoholism. However, in the case of alcoholism, Novo Nordisk, which is the Danish drug maker behind we goviy, isn't even involved. Though one study is happening in its hometown. It didn't even agree to supply scientists with the medicines. Melaomi Kresky and Madison Muller write about the alcoholics who are seeking a cure from these drugs, but without Big Farmer's help. Madison Mueller is health reporter for Bloomberg News and she joins us here in the
Bloomberg studio. It's so rare to see an example of a study that's not actually supported in some way by the manufacturer of a specific drug, especially one that's so lucrative.
What's going on here exactly?
I mean, you'd think that these companies want to study the drugs in as many indications as they can because for them, you know, that helps expand it to more patients, and you know, it's a clear business opportunity. But in
this case, we're not seeing that. And you know, one of the reasons that the experts and the scientists that we talked to for this story gave for that is that utilization of alcohol disorder drugs in the US is so low that the drug makers just don't see this as a good business opportunity.
Why has the utilization been low? I mean, couldn't there be a whole host of reasons? I mean, why maybe they haven't been effective?
Right in the process of reporting this story, I didn't even realize that there were three or four alcohol use on the market. I was like, oh, I thought there was one, or you know, and it didn't work or something. And these drugs do work, they're effective, but they're not there's side effects, and not every doctor, even like some addiction doctors, are not really well educated in how to prescribe these drugs to patients, how to sort of oversee
that process. There usually is a lengthy prior authorization, you know, process to actually even write a prescription, which doctors are busy and they don't even have time for resource is to do. And so there's a lot of barriers to get people on these drugs currently, you know. And that's not even getting into the stigma of all of this and the fact that people just sometimes don't believe that you should be using drugs to treat alcohol use disorders.
So is that a part of this story too.
Yeah, I mean, the stigma definitely is a huge thing, and that's something in the conversations with these scientists, every single one of them brought that up. Aside from the business case the fact that these companies, you know, maybe don't see potential here, the stigma is still such a big issue, and that's an issue that you know, is there regardless of whether or not Novo Nordisk and Eli Lilly are supporting these studies. It's just a continuous problem for this field.
Is it being used off label for this right now. I've seen anecdotal tweets about this. I've seen anecdotal tweets that have said not by people who have alcohol use disorder, but they say basically, hey, I went on this and it stopped me from eating a lot. It stopped me from drinking a lot.
Right, So yeah, and that I mean, that's the reason why some of the some of these Interestingly, some of these studies happened and started or the researchers were at least in the process of getting these studies going long before sort of the hype around these weight laws strugs
really took off this last year. I mean, they had been looking at, you know, anecdotal reports from ozempic because ozempic, remember was approved several years ago, so they've sort of been hearing about this now for a few years from you know, psychologists, friends, psychiatrists that have been talking about this sort of in their inner circles. And then there's there was also some pre clinical studies done and some early studies done in patients. So some of these researchers
have been looking at this for a while. The other ones heard about this just sort of within the last year from you know, anecdotally from people on Twitter being like, I had no desire to drink after going on ozempic and they were like, this is super exciting. We have to see what's going on here, and so they launched Studies sort of as a result of that.
That was Madison Mueller. She's a health reporter for Bloomberg News. And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. Ahead in our next hour, find out which bank is looking to gain market share by following the path of another lender who just went out of business, and the Las Vegas Strip adds a new destination after nearly twenty years in the making. This is Bloomberg Business Week. I'm Tim Steneveex.
Stay with us. Today's top stories and global business headlines are coming up. Right now.
You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Easter on Bloomberg Radio, the Bloomberg Business app, and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
Plenty ahead. In our second hour of the weekend edition of Bloomberg Business Week, we're going to tell you just how expensive buying gifts for your loved ones might get this holiday season. This as we dive into the fortieth installment of PNC's Christmas Price Index. Peter Jackson is the CEO of Flutter. It's the publicly traded owner of mobile
betting platform FanDuel. Peter stops by to break down how his company has become one of the dominant players in the space, its plans for a dual listing in the US, and how much room is left to grow in the world of sports gambling. And speaking of gambling, after nearly two decades of waiting, the Las Vegas fontin Blue is finally open for business. You'll hear from the CEO of
the Project real Estate mogul, Jeffrey Sofer. First up this hour look at the financial sector and Citizens Financial Group. The Wall Street Journal reporting recently that the company behind the regional lender Citizens Bank has opened a new private bank for wealthy customers, and for that, it's taking a page from the book a first Republic bank. That's right, it's the bank that failed back in May. It was known for high end customer service and those low, low
mortgage rates. Emily GRIFFEO and I wanted to know more. We've got a lot to get to with Brendan Kaflin, a vice chairman and head of consumer Banking at Citizens Financial Group. He joins us here in the Bloomberg Interaction Brokers Studio. Brandon, good to have you with us.
How long?
Thanks for having me. I'm doing great. Thanks.
So when I saw that story, I thought this is great because that means we're all going to get low mortgage rates again, just like First Republic did for so long. But that's not necessarily the case with kind of what you guys are doing over at Citizens, Right, it's not okay, too bad, it's too bad. Mortgage rates are here to stay.
We are on a journey as an organization to really build out a world class franchise. We went public back in twenty fourteen, and we viewed this as the next natural step.
And what you're doing is actually hiring a lot of people who were at First Republic.
We are We've hired about two hundred people so far, and with the bank failures in March, it became very clear to us that while those firms would no longer exist, there was a lot of talent in play, and there was white space open in the private banking sector in the United States for a service led firm to come in, and so we brought on a lot of folks. We're
building a high end private bank here at Citizens. We've made no secret about it that we aspire to build a great health management platform, and what we aspire to do is really take the best of some of the firms that are not around anymore.
You point around.
The service culture is really distinctive and unique, but we are making business model corrections. We're going to be highly competitive on lending, but we will be market competitive. We will not undercut the market. We're going to have really great credit quality and we're going to grow at the pace of raising quality deposits. So we build a really durable strategy, but it will be all grounded in high end, intense service that's uncommon in financial services for that client base.
What do you currently make of the state of the consumer, Because we read a lot about how inflation actually hurts the lower end of the consumer the most, and these higher income and individuals are perhaps more shielded from the macro environment and higher inflation. Was that at all part of the decision to cater towards this client.
Well, the economy is not being felt the same way across all demographics, the bottom you know, two or three death stylos the economies back to paycheck to paycheck. The average consumer is still buoyed by all the posts, all the COVID stimulus. We still see consumers with ten to fifteen percent more in their deposit account than prior to COVID, and they're underlying, going.
Going, still.
It's starting to burn down, it is, and it's slowly and slowly but surely burning down. But spending remains high, but excess deposits are still out there in the banking system, and delinquency rates, while they're almost back to normal, they're still lower. So when I look at the overall healthy the economy, and I heard you mentioned potentially a soft landing.
If you make that case, I think you can support it by the health of the consumer really booing the economy because they are in a position of real strength. Even though the economy is not felt the same all the way through every segment, but it is it is true that the higher end of the market has significant
strength and a lot of resilience right now. And I think with the disruption in the space with First Republican SVB exiting the market, we do believe there's a lot of white space in for innovation and banks to step up and reprovide that service level for really part of the economy that is still very very strong.
What do you envision being that service level? Because there's no shortage of folks who want to manage money out there. Trust me, we have them on our program every single day. We never run out of them. And so like where you seeing, where are you seeing the white space?
The beauty the beauty.
Of the market, of the of the business model is actually quite simple. It's two bigger banks that tend to
have great capabilities and very sophisticated capabilities. Also are very big and they're siloed, and so the beauty of those models is that it broke down all the silos and you had a single point of contact that really brought the full breadth of the bank, and they valued your full relationship when if you were doing a multi family commercial real estate deal, or if you're bringing your wealth management or you're doing deposit banking, or if you're part
of the private equity and venture community, all of those parts of your relationship were integrated together as one and the appropriate service was delivered back, you know, in spades to the client. So that's what we aim to replicate, and we've got tremendous feedback. The clients so far have been saying, Hey, look are the brand that we're voting with is the brand our banker? You now employ our banker. We're all in because we know what that person has been able to deliver.
So those individuals you were hiring from First Republic are actually bringing over clients.
The clients are are are are calling us and they're saying, you know, we're we want to recreate that magic that we felt in the service intensity that existed there.
Is explain the relationship with JP Morgan and how you know, can people jump or they get higher if they didn't get laid off during the acquisition that you know, JP Morgan took over the assets of course, then can they just leave? Like how does it work?
You know, employee, We're not intentionally calling anybody at JP Morgan, but you know, employees get to choose where they work for every morning, and we're building out a world class
private bank. And we've hired folks from a lot of different places, but where we have open positions and there are folks that want to change brands, we're up for interviewing them, and we're open for business and in an economy and and you know, banks are obviously playing a lot of defense right now, making sure the deposit book is clean, the commercial real estate business is clean. This is one space where we're playing a lot of offense.
We're going to hire, We're trying to reposition the company, and we think there's white space out there. And so some of the best bankers in the United States thus far have voted with their feet and selected.
A new jersey.
Is the current regulatory environment helping you guys play offense or is it a bit of a hurdle.
Yeah, I think the regulatory environment, obviously, coming off the heels of a crisis like the bank failures, can tend to react pretty strongly. And that's what I think we're all predicting. And my worry is the unintended consequences and the cumulative impact of the regulatory action. So you've got the FED taking a lot of money out of the banking system that triggers banks to be less confident lending. You've got potential liquidity regulation coming to value deposits in
different ways that potentially triggers less lending. And you have Basel three endgame to make banks hold more capital against particular parts of lending that triggers less lending. So I am worried about the cumulative impact of this that banks may be less willing to pook more capital in the market, and it could actually uh be a negative force around US soft landing.
So we'll see.
Time will tell, but but certainly there's a lot of regulatory activity going on now.
Oh go ahead, Yeah, exactly.
We say that word all the time.
I mean, that's like that's your world over and over again, Emily, exactly. Brendan, how do you think about the physical branch in this day and age? I mean you, you guys are relatively limited with your geographical footprint because you're only in eleven states right now, but you do have a thousand branches, so it's a it's a big footprint in eleven states. Are you thinking about how are you thinking about changing geographically as you do this?
Yeah, there's been a conversation in the market for two decades about the death, the death of the retail branch. And uh, you know, look, if you can get through a global pandemic where people were not willing to leave their house, uh, to do much of anything, let alone walk into a branch, and you re emerge an economy that people still value retail banking.
Uh.
I would I would.
Say the US consumers voting with their feet that branch banking is still much, very valued part of how they think about financial services. Now, if you look at gen Z, they'll tell you they have no interest to go to a bank branch, but they actually won't open an account unless there's a physical location in your MSA. So it's viewed as a safety net and they don't actually want to go there, but they need the capacity.
Does that mean you're growing beyond the eleven states they're in right now?
We are.
We're a national bank.
Now.
We just bought HSBC's US franchise. We bought Investors Bank. That put us in New York City, It put us in northern New Jersey, put us in Washington, d C. It put us in southern Florida. So we're now up to about fifteen states. In retail banking, we're open for business nationally with a national digital bank called Citizens Access. You know, so digital is pervasive through service in retail banking. It's the combination of digital and physical banking that really consumers value.
That was Brendan Coughlin, vice Chairman and head of Consumer Banking at Citizens Financial Group, with me and Bloomberg News Cross Asset reporter Emily Graffeo. Emily will be back with us a little later this hour. Up next, we go from serving Americans at the bank to ringing them up at the cash register. A look at the consumers purchasing power this holiday season through the lens of p and c Asset Management Group's annual Christmas Price Index.
The big thing for us is really trying to get a sense of the health of the consumer. So what is the consumer facing in any given holiday season, Where is the supply and demand sort of disconnect or perhaps alignment in any given year, and what does it ultimately mean for the path forward for markets and the economy.
You know, consumption is such a huge component of growth over time, and so we got to make sure we understand what the consumer trends look like and so this is an important piece of analysis.
You're listening to Bloomberg Business Week. This is Bloomberg.
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I want to us Live on YouTube.
You know what, Carol, what there are kind of like a few I don't know, things that are just staples of the holiday season. But think about this for a second eggnog, the Rockefeller Center Christmas tree, Carol's famous holiday cookies, which I'm told include homemade short bread and peppermint bark Uh. Yet I've never actually eaten, but I've told that you do this every year. I've known you at this point for almost four years, and I still have never tried these. But it's a holiday tradition.
It is a holiday tradition. I'm trying to get back to the tradition. There's reasons why it's been on hold, but I know I owe you and a lot of people some cookies, so we'll work on it. I'd love to unreada balls. They're really good, all right, But in terms of traditions. One of the things we always look forward to is PNC Asset Management Groups Christmas Price Index.
This index, or CPI, calculates the true cost of all twelve days of Christmas, so all the gifts, all of the calling birds, gold rings, swimming swans, milking maids, and pear trees.
Amida Gotti is the chief investment Officer at PNC Asset Management Group. She joins us on Zoom from Philadelphia. Amanda, good to have you back with us. You know, I've been waiting eleven months for that much fun. We love doing this each and every year. I got to tell you, the headline number here is quite a bit different than last year, and kind of makes sense when it comes
to the you know, I'm not going to say declared. Yeah, the slowdown that we've gotten in the economy and the prices that have not risen as fast as they did last year, it's not as shocking to buy that par tree this year.
It's not quite as shocking. In general. I'm so delighted to be back with both of you. This is so fun, such a fun annual project. I cannot believe we've been doing this well, not you and me, p and Z's been doing this for forty years. So it's the fortieth anniversary. I'm not going to age or date myself anywhere near.
Wait, so what did it cross?
Wait?
So?
Nineteen eighties?
First time?
Eighty three, nineteen eighty four.
Do you remember what it cost?
Oh?
My god, I believe I'm not going to do that.
I'm not going to do that to you.
Okay, all right, so talk to us about today's today's tally.
So last year, just to tee this up a little bit, last year, the increase on a year over year basis was a whopping ten and a half percent. Right, we were right in the thick of a really hot inflationary environment. This year, I'm happy to report that we're gaining on
it and getting this inflationary battle under control. And so as per the Christmas Price Index, we're only up about two point seven percent year over year, and so that equates to a little over forty six thousand dollars in total to buy all twelve days worth of the gifts.
The long and variable lag is hitting the twelve days of Christmas.
I mean about that.
I will tell you though, Jay Powell would be happy to have inflation at two point seven percent. You guys are are you doing this?
This is a.
Key data point that the FED and the FMC is very much focused on, naturally, right, Well, you.
Know what's interesting, what do you guys find when you do this index? How much it really does kind of tell you about where we are in the inflation cycle. And I went back to nineteen eighty four courtesy of you guys, it was twenty thousand and sixty nine dollars and fifty eight cents.
Yeah, many moons ago, right, Yeah, perspective, I think the big thing for us is really trying to get a sense of the health of the consumer. So what is the concer facing in any given holiday season, Where is the supply and demand sort of disconnect or perhaps alignment in any given year, and what does it ultimately mean for the path forward for markets and the economy. You know, consumption is such a huge component of growth over time, and so we got to make sure we understand what
the consumer trends look like. And so this is an important piece of analysis. Though lighthearted, it is an important piece of analysis.
Is it really like, do you really like you like? Okay, this shows you know, food costs or something like, it really does track with what's going on in the real economy.
I think it does.
You know, it's obviously a specialty gift basket of goods and services, and so it definitely is an indication of maybe the higher end consumer discretionary oriented trends that the economy and consumers in general might be facing. But it is interesting to watch the trends from year to year. It does track pretty nicely.
Okay, well, let's get to some of these individual arts, because I want to make sure we get to all this, Amanda. There was actually no deflation in this, so there were certain items that don't cost any more than they did last year, but nothing actually went down in price. What sticks out to you?
That sounds about right? Yeah, So five of the gifts in the index, four calling birds, five gold rings, naturally my favorite gift, seven swansa swimming, the eight Maids, and the nine Ladies were all flat on a year over year basis. So if you're looking for a gift this holiday season, maybe those five gold rings are kind of a deal on a relative basis here.
Yeah, but don't try to buy lords a leap in right.
No, we certainly saw an increase there, and I think This is an important tie into what we're seeing in the services side of the economy. Try as the FED might to get this inflationary backdrop under control. Services inflation tend to be pretty sticky. The lords certainly fall into the live performances or services category. When we break it down between services and goods, the services component of this index is up almost two times what the good side is.
So pretty notable there in terms of that dynamic.
Like the Taylor Swift effect, Yeah, exactly.
Although the turtle doves very pricey this year compared to last year, five percent higher. Why why our turtle doves so much more expensive this year last year?
So I think, well, on the one hand, it's a fairly limited supply in terms of the breeders that we talked to.
It's the Bitcoin of the dove world.
You're saying, yeah, you could, you could equate it to that, but very limited supply. But I also think demand in this environment for specialty doves is perhaps a little bit less. I don't know the consumers are backing up the truck for specialty doves this holiday season.
It's just kind of I.
Love it is that on your list, Carol, specialty doves this holiday.
Season, absolutely top partridge.
What about a part like well, that's going to be more expensive because the price of memusicians has gone up.
That's right, That's exactly right.
Did any think surprise you in this year's reading.
I think two things probably surprise me the most. The one is that when we look at the core version of the index, so we try to mirror the BLS's methodology and we back out the most volatile component in the Christmas Price Index, it's food and energy for the BLS. For us, it's the swans. And this year, the swans did not move at all, and so I think that's
pretty notable. It's the single biggest line item and it didn't move at all, And so we sort of think about that as perhaps investors have been bracing for black Swan sightings all year, given recessionary concerns lingering that have failed to materialize. And then the other component is that the cost to shop online are up significantly. You're not going to get a deal this year and the Christmas
Price Index by shopping online. So the convenience component of shopping online may allow us to slay our gift list all day, but it's definitely going to cost you.
Why are the Swans so expensive? Oh, they're not expensive? Why are they not?
The Swans are expensive. They're the single biggest line item in general, and they tend to move around a lot year to year. But yeah, not this year.
That was Amanda Gatti, the chief investment officer at PNC Asset Management Group, joining us from Philadelphia. Still to come, on Bloomberg Business Week, The sports betting industry is booming here in the US and around the globe, and as one of the most widely used platforms prepares for its next move, you'll learn how exactly it operates as users watching wager on games in real time. Flutter Entertainment CEO Peter Jackson joins us on the other side. This is Bloomberg.
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Hey sports Betting, Carol. It's exploded in the US since twenty eighteen. That was when the Supreme Court allowed such gambling to expand beyond Nevada. Some three dozen states now allow sports betting, with the business generating more than ten billion dollars in revenue just over the last twelve months. That's according to the market researcher Vixio.
Well, we've got with us the head of the parent company of one of the dominant players in US sports betting. Peter Jackson is a CEO Flutter, It's a publicly traded owner of fan Duel. He joins us on Zoom from the UK. Peter, So nice to have you here with Tim and myself. Let's get right to it. First of all, later this year, I think early next year, you're going to be doing a duelisting in the US, so you'll be traded on the New York Stock EUSTRECT and the
London Stock Exchange. Everything moving ahead as planned.
Yes, Look we're very excited about it. So the plan is that in quarter one next year we will list our shares on the New York Stock Exchange. Can investors will be able to buy into Flutter that stage on their own exchange.
So is what was the decision behind that?
Look, it's something that we've considered for some time, and it's not straightforward, but we're very excited about it. You know, I think it's going to be a great opportunity for American investors to invest in Flutter. It will give us access to that US capital market, the deepest liquidity pool in the world.
We know that.
You know, actually having a US listed asset will help us from a retention attraction of talent in America. That's important for us as a business. And look, we are the world's leading gaming business and being listed on the neuro Stock Exchange feels like the right thing to do for us.
How do you see yourself kind of holding a high market share in the US sports gaming market, You're going to have some competition. It's pretty competitive marketplace and some big players already.
It's never been easy from the day we started. But you know, we delivered the best product to our customers and we believe that's what sets us apart.
So are you how concerned are you about the competition that you have? You know, with draft kings right now, roughly thirty percent thirty one percent of the market at least, depending on you know which analysts you speak to. How does that rivalry work? Talk to us a little bit about that.
Look, Draft Kings and Fangil were the leading businesses originally in daily fantasy, and we've both managed to take that leadership position into sports.
And you guys were going to merge at one point, Well.
There was talk of that a very long time ago, in twenty seventeen. Yeah, but look, we were able to take some of the product advantages we have globally and bring them to the US audience. So the parala product, which we've become very famous for, is something we'd invented in Australia, we've perfected in the UK, and we brought to the US audience and that's what's given us a real leg forward.
Can you explain that for people who are not, you know, gamblers, Yeah, gamblers, I mean this is confusing stuff.
Yeah, Look, it's a it's a relatively straightforward concept and that you know, if you're watching a game, So you know, if you're watching the forty nine ers playing over the weekend, you may wanted to have a bet on the outcome. You may have thought the forty nine ers were going to win, but there may also be a couple of players who you wanted to highlight in the game, who
were going to score some touchdowns. There may be some passing yards you wanted to capture as well in your bet, and you can combine all of those outcomes into one parlay and put ten dollars on it and have fun watching the matches if it comes in.
So it gives you kind of multiple plays or multiple bets if you will in one.
Yeah, exactly. You know you have to hit each of the legs, but if you do, you get much longer odds and then you win more money.
So what's Peter, what's the kind of what's the growth that you've seen in that on your platform?
We've seen some very extensive take up in it. You know, if I look at something like the basketball season this year, you know around you know, eighty percent of our customers have played a parlay bet already in this basketball season. It's something that you know, has really caught the attention of our betters across the US. They enjoy it and it brings real excitement to them when they're watching a game.
There must be regulatory challenges here, given that you know, gambling like this is only legal in about three dozen states in the US, and then you have the whole European element here talk to us about tighter regulation specifically in Europe. It seems like it's moving the other way in the US, but you know, tighter REGs in Europe, what's going on there.
We operate globally, so you know, there's many different environments we participate in. In the UK, there's been some regulatory reviews of the gambling sector. We changed our position in the market at the beginning of last year and it stood us in really good stead getting ahead of the regulatory changes.
So we're now taking market share very significantly in the in the UK market, but around the world, all of our brands, whether it's Fangil or Paddy Pan, the UK Sports Bed in Australia, we tend to have the leading positions in the market and we're very focused on recreational customers. You know, people who are spending ten pounds a week betting in the UK. So this is small steak stuff
and we take safer gambling very seriously. You know, we want to lead the race at the top and make sure we provide all of our customers with the very safe experience.
Peter, you know, I feel like we've been talking about online gaming for a long time, you know, in the lead up to the Supreme Court decision, which ultimately came down in twenty eighteen, and then since then, what would surprise you think the Bloomberg audience about what's going on in this industry? Is it the growth? And if so, give us some numbers. What is it that would maybe surprise our investing audience.
I think there are several things that people always shopped at when I talk to them about you know what we do. I mean, think about that that match, right, you know, when the forty nine ers played their conference rivals, the Eagles in Philly. You know, we have to sit there and calculate all the odds of all the different actions at the players can be undertaking real time. We're taking tens of thousands of bets and customers and we
have to assess how the probabilities are changing. Take those odds, match them, and you know, when customers decide to take their money, you know, pay them out quickly. So it's a very complex set of challenges that we have from a data perspective. You know, if you look at it that game, there will have been a trillion different combinations
of things that people could bet on. So that it's an incredibly complicated set of circumstances and simplifying that for customers so they can easily find that what they want to bet on is something that's not straightforward. So if you look at the external references, we've been assessed to be the best operator in our space. You know, Aliston Cridcheck would rate us number one, and we have been
for two years. And having that leading product is really important to make sure that customers can cut through all of that complexity find they'll want to bet on and have some fun when they're watching the game.
Peter, what's the connection or the core relation with a strong consumer and strengthen the economy when it comes to usage of your product? What do you see out there.
We've been operating for a very long time, as you were saying, in some of our European markets, and if we look at their sort of history from a macro perspective, whilst ever the's strong levels of employment, we see strong performance in our business. So you know, around the world at the moment, we haven't seen any signals that any of the impact that we're seeing from us a fiscal and macro perspective is impacting our business.
At all.
What about the weakness that you're reporting in Australia, what's behind that weakness.
Look, you're right, we have identifiable mean outside Q three is we've seen some weakness in Australia. They had a very significant lockdown in COVID in Australia. I'm not sure how much your listeners followed it, you know, I mean there were police on the streets making sure people can leave their houses. It was a very difficult situation. So there's been a big COVID reversion in Australia. They're also pushing through some tax changes and there's also some regular
to me regularty impacts. But you know, Sports bet, which is our brand in Australia. We are the you know, we're the biggest business with a market leader for recreational customers. We just had the Melbourne Cup, you know, which was you know, it's the race that stops the nation. So you know, I'm proud of what the seam are doing and the business are gone to grow in the future for us.
Then our thanks to Peter Jackson, he's the CEO of Flutter it's the publicly traded owner of fan Duel. We'll be on the lookout for that US listing early in the new year. You're listening to Bloomberg business Week coming up. We'll stick with gaming and turn towards Sin City, which has just added a long awaited hotel to its world famous strip, even though the project was conceived all the
way back in two thousand and five. Font and Blue Development Chairman and chief executive Officer Jeffrey Sofer explains his vision for the newest luxury experience in Las Vegas. This is Bloomberg.
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Las Vegas, Nevada is in the midst of a cultural and tourism renaissance, posting the highest tourism occupancy since twenty twenty, not to mention an immersive sphere that has plastered all over social media. Well now, a historic staple of Miami, Florida has made its way to Sin City, as the Fonts and Blue Las Vegas officially opened its doors this
past Wednesday. The luxury resort company aims to be the pre eminent leader in country clubs, golf courses, high end retail, gaming and entertainment, resorts and hospitality, yachting, aviation, and luxury residential and our next guest, Jeffrey Sofer, has been at the helm of Fun and Blue Development since the nineteen nineties. He joined me and Emily Graffeo ahead of the grand opening.
It really was just something that sort of just you know, came upon me and it was offered to us, and you know, obviously it just made sense. It was a natural move for us. And you know, obviously I knew the value, I knew what I was buying, so I kind of stood the asset. And it was just it was a big empty steel building, you know, and concrete building. It wasn't you know, there wasn't things that were finished in here.
So what can guess expect at the newest luxury resort to open on.
The story, I think they can expect an ultra luxury resort that's design orientated. It's got seventy years of history this brand, it was obviously the Found Blue when it was built in nineteen fifty four. Open has a tremendous amount of history with big resorts. It was the first world mega resort in beach in the United States when it opened in fifty four, and obviously a lot of celebrities and dignitaries from all over the world that have
been through there. It has a massive history, and we took a lot of the design elements from that and put it inside here. And really it's just, you know, it's a luxurious hotel that's built around design. It's not you know, we've got a lot of different food and restaurant outlets and types of places to eat, and of course entertainment venues and everything you would see in the Las Vegas venue, But it's really designed around, you know, a design orientated hotel.
I have to admit I've been to the Miami Resort a few times for the ETF Exchange conference.
Is that where they do it?
Yes, I write about ETF and so I know the Fountain Blue because of that conference. Jeffryan, I'm wondering, like, what's the outlook here for business travel?
Are you asking if the ETF conference is going to be the Las Vegas ones?
You would love to go to Las Vegas, That's what she's asking. But also, I mean if business travels slowing down in the macro environment. Does that impact the resort or is this really more geared towards people on vacation.
This is a resort. So obviously we you know, we have a lot of you know, business corporation, business, corporate, business association, business during the week. Obviously, Las Vegas has major citywide conventions, and our hotel happens to be right next to the convention center, which we think will be a strategic advantage for us because you can actually walk out the door and walk over there and not have to wait in line for a cab or an uber or whatever.
In the past, it can be little hectic here. It's it's a it's a big resort.
I mean obviously we've got you know, sixty thousand foot spa and you know, massive gyms and obviously restaurants, and we'll have all different kinds of components. But yes, I mean we'll have you know, business travelers in the sense that people are coming here for meetings, and we'll definitely have a big rope component group component. We have you know, five hundred and fifty thousand feet of meeting space here,
so which is a significant amount. So and it has we have a lot of different varieties types of meeting space, so we can hold can accommodate a lot of different types of customers that want that space.
That was Jeffrey Sofer, Chairman and CEO of funt and Blue Development, And that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thank you so much for joining us, and a big thank you to Emily Graffeo and Mike Reagan for sharing some of the co hosting duties this past week as Carol has been on vacation. Be sure to tune into Bloomberg Business Week Monday through Friday starting at three pm Wall Street Time on Bloomberg
Radio and on Sirius XM Channel one twenty one. You can also watch our daily broadcast on YouTube just search Bloomberg Global News, and we're simulcast on Bloomberg Originals available at Bloomberg dot com, Slash Originals, and streaming platforms like Roku, Amazon, fireTV,
Samsung TV Plus and more. Find our Bloomberg BusinessWeek podcast at Bloomberg dot com, Apple or wherever you get your podcasts, and the latest edition of the magazine is available on newstands now at Bloomberg dot com and always on the Bloomberg Terminal. Have a good and safe weekend everyone. For Carol Master, I'm Tim stanoveex Stay with us. Today's top stories and global business headlines are coming up right now.
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