Bloomberg Businessweek Weekend - May 30th, 2020

exactly what the plans are doing. And then we had some headlines maybe green shoots, perhaps U S State's jobless roles they shrank for the first time during the virus pandemic, but nonetheless we still have more than forty million Americans have filed for those benefits in the past two and a half months. So this contradictory as people try to continually look forward, well, and it was a week where industry by industry, we started to get a picture of

where we go from here. We try over the course of the week to talk to lots of different people and lots of different businesses, be at the financial industry, and we spoke with Margaret Keene over at synchrony about what she's seeing there, of course, a massive credit card issuer.

We talked to Nancy Spielberg. She's a director, she understands where film is going from here and salt Con Uh frequent guest on this show, someone we talked to a lot and listen, no industry, no business, no experience has been disrupted in many ways more than learning. So all that straight ahead. Yeah, absolutely, and let's not forget to WHAWE was in the news once again, so we caught up with Huawei USA's chief security officer, Andy Purdy, and

then we also heard about the private aviation industry. Interesting. Of course it's shut down like everything else, but they're starting to see some new trends and new demands. So Andrew Collins UH, the CEO and president of Sentient Jet, stop by as well. First up, though, we had to talk about where we are in the virus. That's right. We caught up with Dr Joe and Robert. She's the chief quality officer at Providence St. Joseph Health and this

has been a go two source for us. Fair to say, we've talked to a lot of their senior doctors and senior officials because they have been on the front lines since the very beginning. The first recorded case of the virus in the United States. It was at their hospital.

She helped frame where we are now and where we may be going as far as where I think we are with the spread of the pandemic UM, and I think by and large most of our country has done really well in physical distancing and masking and other other areas. I think we all know the challenges bringing our country

together around this UM. I think we in healthcare are looking too early to mid June to see what the effects are of the opening up that we really saw this Memorial Day, because everything that we do today will show up two or three weeks later in our hospitals when people get sick and start coming in, and we're watching that closely, day by day. And so Dr roberts is care All said at the top, you know, you guys were the first to see cases here in the

United States. What have you learned about treatment? What have you learned about this disease that may be useful to those of us who aren't, who weren't on the front end as much. Yeah, I think what we're seeing in the mass media is born out with us locally as well. We just this morning I had a discussion of the use of rim disavere, as you know, that's being released more and more through Gilead and UM. We believe we have enough doses on hand to treat all of our

patients that we currently have. It's not a magic bullet. It doesn't preclude any of the things that we all need to do around masking and social distancing, but it does seem to at least lower the length of stay in our hospitals, and we are expecting more reports out soon. Hopefully that rim disavere will actually improve the mortality rates and decrease the number of deaths. But it's just one piece of a bigger story that continues to evolve week by week. And how soon will we really know the

efficacy of ramdesevie. Is it weeks? Is it months? Like? What's the timeline there? I think, like I said, I think every week we see more science being released, more studies being completed. I think within the next two to three weeks we'll see more of the story around reseevere as well as other agents that are in the pipeline. Is a second wave a given? Yes, it is. I think there's we believe, there's no doubt that a second

wave will come. We don't know when it will come, we don't know how big it will be, UM, but we we are certainly putting together plans inside of Providence to try to detect the second wave early and to here for it. As you know, in the nineteen eighteen flu pandemic, it was the second wave that was the big killer. Five times as many people died in the second wave as in the first wave. And so we're not out of the woods yet. We're in a breathing space where we can all get ready for the next wave.

So what's the science behind that that a second wave is more deadly and would that necessarily be the case with this virus? Would We don't know. We are we're in a position of not knowing what the second wave will look like. UM. I wouldn't say why. I don't think any of us expect the second wave will be worse, but we have to prepare as if it could be worse.

And that's Dr Joean Roberts to Quality officer over at Providence St. Joseph's Health and Carol, I really felt this way, and you and I were communicating via in some message right after we got done with this interview. This was the interview I needed this week to really understand where we are and where we're going. A reality check to some extent, some optimism, but certainly some realism too. Yeah. Absolutely, she took us to the steps. You need testing, you

need therapies, and then ultimately need a vaccine. And one of the things that stayed with me, Jason is when we asked her, is a second wave a given? And she simply said, yes, I don't know when and don't know how big. And that explains some of the nervousness that continues to stay, certainly in our society, in the markets and in the business community at large. But I do always feel like I get everything that's going on

when it comes to the virus. When she sits down and talks to us, we get it explained absolutely, and the optimism clearly is around our preparedness when it comes back around again. Coming up our conversation with Margaret Keene, she's the CEO of Synchrony Financial, really has some great insight on what consumers are up to. This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio. Hello, I'm

Carol Masser and I'm Jason Kelly. Today we're bringing you some of the most important, we hope informative conversations we had on our daily Bloomberg Business Week radio show. And now let's get to our conversation with Margaret kench Is, the CEO of Synchrony Financial. I'd say going into the pandemic, the consumer was very strong. We were we were doing

really well, sales were strong, payments were coming in. The consumer is really acting very responsibly, and we felt like we were going to have, you know, a great year. Um then the pandemic came along and obviously, you know, the initial onset of that really shut down most of the retail landscape. And you know, we saw our sales and we said this in our earnings down averaging about thirty two to thirty four percent UM. What we've seen since then, though, is definitely a bit of a comeback.

Our sales are down there ten uh so certainly the consumer is um back out and shopping, and uh, you know, we're seeing it across the US. So it isn't even just in the states that I would say are completely open. It's it's as off the board. Well that's you know, we're going to pay closest attention to that. Yeah, I mean,

because you know, it's interesting. We've been having so many conversations, certainly here at Bloomberg, you know that it feels like to some extent we're flying blind when it comes to the economy. We know the past data points looking backwards are not going to be good. We get that, right, but we are wondering about what kind of a bounce back do we get on the other side. So you're saying consumers are coming back, I mean, what kind of

indications are you know, what are they spending? And and you said it's up about ten percent or what can you tell us in terms of well, it's down from where it was at the beginning, so we dropped ourselves. We're at about they dropped all thirty two is then they come back. Now they're down ten percent from what they were free pandemic, So that's a pretty big swing. Um. What I would say is, um, you know, it's the

things we're reading about. You know, for instance, power sports, we're not big in power works, but how how sport sales are up a hundred percent, so people are buying things that they can play with at home us. And we're seeing things related to the home be very strong, whether that um home furnishings or or things that people are doing to fix up their home. So we're certainly seeing strengths there. Um. You know, we were talking about bicycles.

Adult bicycles. You can't really get sold out. So it's really been I think what's happening with the conservative a couple of things. We we believe One is people have given up vacations. They're staying at home and finding stay at home so they're fixing up their homes and doing activities around the house with their children and their families. I think, uh, you know, we think that's a positive and and I think that's where consumers are spending. Obviously,

you know, we have very strong online partners. We're definitely seeing online being a big part of that process as well. Um. But I you know, honestly, I think we're we're we're probably um, we're probably a bit more positive than we thought we were going to be at this point when we first started out here. Yeah, talk take a lot of stimulus out there, and that's something we've got to pay attention to. There's still a lot of stimulus, and I think what we've been saying is we've got to

make it through this summer. See when that stimulus runs out, and then where do we where do we stand? And we probably want to have a good read until sir quarter. And So Margaret, when you think about the retail environment, obviously so many things have been shut down. You've had well known brands UH go bankrupt and you know, some

may restructure, some may never come back. What's the net effect of that for basically sort of the world at large, but also for your business this shift to online where I know you're very active as well, But break that down for us if you can sure you know, I would say, look, retail has been going through a transformation requite a while. I think the pandemic and the fact that people have to shut their doors just accelerated some

of what was going to happen over time. So we're seeing that, you know, in some of our partners as well as many other retailers that are not our partners. And I think what's happening is you're seeing retailers who are strong becoming even stronger. And I think that will continue. Um, you know, I do believe that there's been a lot of view that retail is dead. I do not believe

retailer is dead. I think people like to shop. I think we will over retail, and I think the strong retailers will certainly survive this and probably be stronger in the end. I do think retail has to have a digital strategy as well. They need to be able to be where that customer is shopping. And I think from a customer behavior perspective, we certainly have seen a continued shift and an acceleration of people shopping digitally, and I

think that will continue. So I think there are certain things that people may have never thought of buying online before, but of buying online and have not been comfortable with that through this process, and that's going to shift consumer behavior. I think going forward, what do you think people will still shop? People will still shop. Yeah, I agree. I think it's a social thing to some extent, and people

enjoy actually going out and feeling merchandise. And I think, you know, maybe in New York it's going to take a little while to come back, but you know, until people feel safe safer. What are you seeing in terms of delinquencies and people's ability to actually pay their credit cards. So this is this is probably one of the more interesting things that we're trying to figure out. You know,

constomers are paying that credit card. So about of the customers who initially put themselves into a deferred payment status have actually come out of that and are paying their accounts. So we actually are seeing good payments right now, which is another thing that I think has us a little bit a pause to understand. Why is that now? Is it the stimulus? Is it the fact that people aren't spending money elsewhere on discretionaries, so they're paying their credit

cards and their their obligations. Um, you know, we have a lot of people who are receiving benefits, so is that helping. Probably all these things are helping, you know. The other is a big one is you know, people aren't driving, so gas privates are down even if they are driving, so there's extra dollars there. So right now,

our our our performance in our books is good. We're very cautious on this though, because we still believe that, you know, we got to see how people come out of this after the stimulus runs out, and more importantly, what is the job market look like? How many people are still at work. I think we're still very clauseous on this particular area. And that's Margaret Keen, the CEO

of Synchrony Financial. And as we said going into the conversation, Carol, you know, this is a company that really has an intimate window into how consumers are feeling, but also how

retailers are faring. Amid all of this, we've seen a raft of bankruptcies, we've seen demand really EBB, and you do wonder what the window looks like going forward, right, and if stores more stores shut down and people don't have to use their cards and more things are done online, you do wonder what will be ultimately long term the

impact on a company like Synchrony Financial. You're listening to Bloomberg this week, coming up a conversation on managing the wealth of athletes with Joe McClean, managing partner at Intersect Capital. This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio. So Jason will bring you some of the most important and informative conversations we had throughout the week on our daily radio show. And of course all of this happening

in real time as news was happening around us. And that included conversations about the sports world, which we know it's very tricky getting that back to normal. Absolutely. Joe McClean, he's the managing partner over at Intersect Capital, and you hear Intersect Capital and you think, all right, what does this have to do with sports? A lot actually, because he is advising athletes on their money from the time

that they signed their first contract. He has an amazing sort of roster of folks, but also a very methodical plan on how they should be thinking about their money. And in a world without sports, that's even trickier. Basketball is. I'm not as optimistic, although if you talk to the players, they're very optimistic. They have the best relationship with their commissioner, frankly um And and the commission has been very candid

um but I know he's also been very cautious. You know, we have some players that are still sitting Americans that are sitting in China waiting for that league to start. And they've been there now for months. They've quarantined for two weeks, They've now been there for over two months. Every players in one city and they're still not ready

to go. So I'm not saying China is a leading indicator of what the NBA can do in the States, but there's still no movement there, and it's tough to say that they'll be moving in the States until I see some positive momentum there. What about other sports? All right, so we talked about golf, you think first, you're not

as optimistic about basketball. What else? So baseball, you know, they're they're installed with with the conversations they're trying to have, you know, it's they've already come out ob see this going to be a reduced schedule, um, which means reduced salaries. Um. They're still also fighting for some of the details like um, you know, in baseball, you really want to get your service time under your belt each year, and if they don't play a certain amount of games, they may not

qualified for that. So the players want to make sure that all their rights are protected, um. Not just not just that it's safe to play, but that's also they're not giving in on anything they wouldn't give in a regular season. So I think baseball has has a good opportunity to come back, but it's not surely nothing in the summer, and and football, I think it's the same. You know, they've until each state starts opening up and giving um, you know, the players the opportunity to even train,

let alone play. Um, I still don't see any in the summer there they they're they've already been told they can't take physicals until mid mid June, late June. So, um, it's gonna be a long way, long long wait for all of us. Well, so let's talk about baseball if we can for a second, because the economics there, I think are really interesting and this really plays, I think into a lot of what you talk about with with

your clients. Um. And you know, I had a chance to catch up earlier in the week with Rachel Luba, who is the agent to Trevor Bauer, as you know, and you know, one of the things she said was that they are so far apart in in part because there's it feels like a fundamental disagreement on the economics and sort of who should kind of bear the burden

of this? And I do wonder for someone who is advising UH baseball players and others about their their wealth, what you make of this argument between the owners and the players. Well, in my estimation, baseball has their players Association has always had one of the strongest, strongest teams in place for the players, um and and that has

led to some incredible economics on behalf of the players. However, you know the problem now is there's some some athletes making million dollars a year and they're already seeing a ten million dollar pay cut. Nobody's feeling sorry for them, but um, there's gonna be a point where they've got to have some compromises where in the past they haven't UM.

And then every once in a while the owners want to take out, you know, for a spin, the whole idea of of salary caps um, which obviously in baseball don't exist, they do exist in and other sports UM that the players have always fought against. So there's going to be a compromise, I think because they know how important it is to get the game out. Because in fairness, the television has been strong, um, but but the popularity

hasn't been there. So you don't want them to go away for entire season, um, I don't think, because you'll lose a lot of momentum. And that's Joe mcclaim, managing partner at Interset Capital Love catching up with him because

he does represent athletes across the spectrum. So many professional athletes on the sidelines, as it were, right now, really on the sidelines, not the ones they're used to, trying to get back to work, trying to figure out not just their health and safety, but their financial worth right now, Carol, I gotta say, Jason, one of the things that stuck with me was what he said about his players, that they were realizing all the cause and effect that they

have on so many others by them not playing, you know, seeing that whole sports infrastructure that's impacted. And he said that some of them were giving up their income to help out some of those other folks that were also put out of work as a result of the virus. So I really that really just kind of stayed with me. All Right, you're listening to Bloomberg Business Week. Coming up, we talk online learning with sal Khan of Khan Academy.

He has seen a surge as more than a billion children worldwide have been impacted by school closures because of COVID nineteen one. Interesting to hear from him what's temporary and what may be permanent in a world that we know is utterly changed. This is Bloomberg, This is Bloomberg Business Week from Bloomberg Radio. Well, today we're being you some of the most important and informative conversations Carol and I had this week on our daily Bloomberg Business Week

radio show. And Jason, of course, we last caught up with him, meaning salth Cohn, when we were at the Harvard Business School. We were doing a live remote TV and radio. He has Harvard be School class of two thousand three. He's also, of course the founder of Khan Academy. It's a nonprofit that set out to provide a great education to all students around the world, and we know so many students have been impacted, understandably so because of

the virus. So to catch up with him, find out what they've been doing to help those kids who are now at home learning from home, and also to find out how much of this stays with us longer term. We started seeing our traffic pick up in Asia even in January and February because of closures there, But then in March when you had the closures in the US

and frankly the rest of the world. We've seen our traffic depending on the week, the two hundred fifty percent three percent of normal Uh, you know, we we were serving twenty millions students per month pre COVID. We're seeing the absolutely number of students go up about sixty year, seventy percent, and they're spending sixty s a more time

per student. So on a daily basis, we had about thirty million minutes of learning per day and now we're seeing closer to eighty or nine million minutes of learning per day. Wow. Wow, that is remarkable. And what have you learned from looking at that? Are there's certain things that that people are especially focused on. I mean, I know most students, I mean they're having to do all their learning online. But but I wonder how as you go, as you go down into the data, what is it

showing you. Yeah, you know, it's it's essentially everyone doubling down on what they were already doing on kind academy before, even before the crisis, about half of our usage was what we call teacher directed usage. This is teachers using it in a more formal way in their classroom, and

it seems like that continues to be the case. We are most known for our depth and math where stas videos, but exercise was starting in even pre k all the way through college and so there's still a lot of heavy emphasis there, but we're seeing a lot of usage of our science content, English and language arts are early learning app with kind Academy kids, and some of our standardized test prep. We we have a partnership with a college board around the set as well. So we're what

do you think is going to happen with that? Because you are increasingly seeing because of the virus, schools back off of students having to have those tests. But I do feel like there's been a trend away from that. Do you think that will ultimately pick up momentum oh around the whole testing optional or even not using the Yeah, yeah, it's it's it's an interesting phenomenon. And I've been talking to folks in the state here in California. I see both sides of the issue. People don't want people to

index too heavily on one test. It causes anxiety. Not every student performs equally on you know, they're not an equal test taker. With that said, it's pretty clear that things like these standardized tests, in conjunction with other data points like grades and recommendations, do correlate pretty high with college readiness. And so when you take some of those things out, you do have to ask, well, what is going to replace it? A lot of people forget the history.

The reason why the set was even created was because the hundred years ago it was so unequal. You have to essentially go to a famous school to get into a famous school. Uh. And then the SAT emerged and that then it became more of a meritocracy. So it has to be replaced with something else. One possibility is maybe things like Mastery on con Academy could be viewed as another of and I wouldn't use it viewed as a replacement, but it could be viewed as another way

to understand student's readiness. And what's appealing about that. It's not just based on how you perform on one Saturday morning. You can always improve it, and just by the virtue of working on it, you're learning more. Talking about sort of the inequalities that the S A T and other standardized tests were meant to combat, and obviously that is a debate that will rage on for however long those

tests exist. One of the other inequalities, it feels like this pandemic has laid there is around technology, and I wonder what you make of that and what you've learned and what we all should be taking away from this in terms of what sort of access students of all shapes and sizes and socioeconomic status need in order to

really learn. Yeah, and I don't think I'm telling anything that's surprising to folks, But as we give to this COVID crisis, not just to keep learning on a platform like Academy, but frankly, let's just stay connected with franks, to stay conected with friends and family. It's it's been a lifeline for for most of us, and in many parts of the country, there's the population that does not have devices at home or reasonable internet access at home,

and so that frankly has always been a problem. People have talked about the digital bide, and now with this whole state at home order and schools having to close physically, it's become that much worse. The silver lining, if there is one, is that, because it's become so urgent, you're seeing government, school districts, corporations take action like they were taken before. New York City public schools they distributed almost three thousand laptops in a matter of weeks. They got

the local telecom carriers to get free internet access. Miami Dade did something similar in Las Vegas, Los Angeles. So one silver lining is because it's such a urgent need, a lot of the digital divide hopefully will get closed because there's a lot more motivation to do it. But obviously you need that access if you're able to tap into everything else like kon, Academy or anything else. Yeah, that's a good point because that's the thing we're trying to figure out to sell is you know how much

stays with us? So I love to hear those stories, you know about free WiFi and the equipment being you know, distributed to those who didn't have it. How much of it do you think stays with us on the other side of it. I think it's gotta stay. I can't imagine a world where they've done it and then they have to take it back. You know. The heavy lifting,

frankly has already been done. And every school district that we've always talked about, you know, we've always talked about the value of personalized learning, about students being able to learn in a way that's not bow by time or space, and and teachers will be able to understand data when kids are doing homework and things like that, and everyone intellectually agrees with it, But then they would say, but there's ten percent of the kids who don't have interactent homes.

So we can't do this innovation for the entire classroom. And so now that there's been a will and a desire, uh and and an action taken to close the digital divide, I can't imagine that we'll go back on that. So, sal as you think about a world in which we are, you know, remain concerned about health and safety, and we're rethinking what school looks like. We know that there's some amount of online learning we can do. We think about hybrid situations where you know, maybe you have some kids

in the classrooms, some kids remote learning. What's feasible I mean, knowing this world as well as you do, what is a feasible way that we can really integrate technology into some sort of you know, for lack of better terms, sort of hybrid solution. Yeah, it's pretty cure that this coming back to school's going to have to be hybrid in some way, shape or form. There's going to be kids whose families don't steel comfortable sending them. They might

have health issues. That are family member. Might you know, they might have a senior their grandparents lives with them. And so I think school districts are and and colleges are really trying to figure out how do you do this in the world where some kids might be there, but then there's half the kids who are watching from home.

So the reality is they're going they will have to lean more on what you can call asynchronous tools like academy where kids can learn at their own time and pace, and then teachers can monitor and then leverage video conferencing, whether room or Google meets or whatever. More uh, even when they are live with the students, because they're going to have some subset of the kids who aren't there, and when you when you lean more on these types of tools, you know, I've been I'm talking to a

lot of teachers about this. It's always been the case that a lecture can be a little bit not engaging for a lot of students. And it's even more so if you're doing a video conference with your lecturing the whole time, that might as well be a video And so this is really pushing teachers in school to think about how do we make it much more interactive how do we pull those kids who are watching from home

into the conversation and have them interact. So what role do you think online learning virtual learning will have ultimately on higher education. I know people already get degrees, but I'm thinking about those institutions where, you know, part of the experience, a big part of it is being on campus somewhere among other students. And I do wonder, especially as higher education has gotten so expensive, you know, whether or not there might be some kind of mix going

on in the future. That's what I think too. I think this crisis has been a forced on bundling of what higher education offers. It offers essentially three things. It offers an education like you will learn of this set of skills. It offers socialization, being able to hang out in the plot and throw the frisbee, or go to parties on weekends, or hang out in the dorm and talk about your your life dreams with folks that you've

you've met. And then it does credentially. And I think we've talked about in the past that this is the direction that we might go in anywhere regardless. But you're seeing record numbers of kids are deferring, you know, even to very prestigious universities because they're like, well, I really wanted to pay that tuition because I wanted to hang out with kids in the quad and have that experience.

And and they're realizing that they can get some of the learning just find virtually on you know, virtual community college or on a mook or some other type of platform. So I think it's going to be really interesting. My

gut sense is education as a whole. You might see a little bit of an unbundling where there will always be certain pieces that are happening on video conferencing virtually, especially for older students, college A students or adult learners, and then for those who want that in person experience, there's waste for them to get it. That's how can the founder of con Academy, and he s this is one of the world I feel like education and healthcare

they have been slow to innovate. And I do think the impact of the world being shut down by the virus, we're going to see some big changes. And I do think that in foods, online learning well, and I dare say not to be overly glib, but you know, it's one thing to get a kick in the butt. This is a kick in the teeth in many ways for the world of education. And you do wonder the college presidents that you and I have talked to, the parents that we are that we talked to all the time.

Everyone's thinking about it from K through college, how learning will be different. And that wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio. I'm Jason Kelly and I'm Carol Mass are plenty coming up in our next hour, We're gonna hear about the future of digital fitness with Jason LeRose of Equinox Media. Man, they've been pivoting two more digital offerings of fitness for

all of those who are at home well. And also, if you want to get out, you might not feel like getting on a commercial flight, and maybe you have the means to get on a private jet. Andrew Collins, he's the CEO of Cynthia Jets, certainly seeing a boost in his business and thinking about how it may be different going forward. And Nancy Spielberg Carol, Yeah, it's an interview we were really looking forward to. Yes, folks, you re ignize the name. It's the little sister of Steven.

I gotta say, just talking about their growing up, what their parents did to really foster creativity and she and her siblings was really wonderful and also just getting her thoughts about how do we make films going forward. So a really wonderful conversation all that I had. This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio. Hello, I'm

Carol Masser and I'm Jason Kelly. Today, well, we're bringing you some of the most important and we hope in formative conversations we had on our daily Bloomberg Business Week radio show. And just some of the conversations we had was with the Sentient Jet president CEO Andrew Collins. Now, understandably, demand just dropped off as soon as the world shut down, but now what they're seeing is demand come back and people who now view private aviation as a necessity rather

than as a luxury. That's right. I love talking about flying private. Also, we always love talking about fitness and the movies. We heard about the fitting aside from Jason Rose over at Equinox and the movies from Nancy Spielberg. Yet you recognize the last name, Yeah, absolutely, and we know Jason that Whahwei was in the news once again this week at Canadian judge ruling that the company's CFO will have to stay under house arrest as our extradition

hearing is continue. There's also, let's not forget the backdrop of once again increased tension between the United States and China over many many different matters, including China really stepping up its uh moves to really control Hong Kong. So with all that happening, Jason, we got a chance to catch up with Hahwei Technologies, usays Chief security Officer Andy

Purty Well. The effort against Miss Mong, our chief financial officer, is part of the overall effort for the last couple of years by the US government to carpet bomb WAWE out of existence, and in terms of the impact on the company, the decision involving Miss Mong and the process for extraditional take quite a number of months, if not years, before there might be a actual trial in the Eastern District of New York. And we have great confidence in the legal systems of Canada and the US, so we

feel like I shall be vindicated in the end. But right now, this this campaign against Wawei, the recent ramping up of pressure on American company's ability to sell to WAWI, even through international companies, is going to have a tremendous negative impact on American jobs. You know, it's interesting, you know that this is going on amid a week or two where we are seeing once again heightened tensions UH and back and forth between the head of the United States,

President Trump and of course Chinese President Jen Ping. And what how do you see this? Uh? You know, you've got to run your business amid kind of all of this fury, and we're trying to figure out is that rhetoric or is it going to turn into actions that ultimately impact both China and the United States. Well, there's certainly been an impact on our company. The impact US about twelve million dollars last year, and we haven't been able to estimate what the impact would be this year.

Of course, it's it's complicated by the U added factor of the pandemic, But you look at the overall situation, the geopolitical situation between China and the US is what we're talking about, and that's exacerbated now by the US presidential campaign. So the the the competition among President Trump and UH. A former Vice President Biden to out maneuver the other in terms of anti China rhetoric, kind of

a new red scare kind of thing. UM indicates that this battle is going to go on at least through the election. And there doesn't seem to be rational discussion and people don't seem to care about the fact that American jobs are going to be lost as a result. And can you quantify, you know, the jobs piece of this. I understand that obviously things are complicated, but in terms of the pandemic, and it remains to be seen what the total economic impact is is. But help us understand.

You know, you guys have several offices around the country here, what is it? Men? And and maybe help us understand sort of the one two punches that were of this action and this UH confrontation between the United States and China as well as the pandemic. It synthesized that for us if you can andy well in terms of within the US, we have two issues. We have the issue of whether or not Huawei can sell to American companies

and right now we're serving parts of rural America. UH. And the other issue is the ability of American companies nearly three want to be able to sell to Wali. So in terms of our global revenues, which last year or despite all this, we're up about. Um, you know, we were impacted about twelve billion dollars. But the uh, the the annual amount that we procure from American companies is not just to serve our customers in America, it's

our global market. At its height, we had a thirty or thirty two percent of all Walwi global components came from American companies and they're primarily in the semiconductor industry. And you can see in the last couple of months, Uh, they can speak for it a lot better than that I can that American UM semiconductor companies and their association's trade associations have basically been saying, look, the limitations on the ability of American companies to sell a Walway's averaging

about twelve billion a year. That is estimated to be between forty and fifty thousand direct jobs, not to count the indirect jobs. And so the fact is, well, you know, we're fighting for our survival. Um, We're gonna be okay, and we would like to continue to buy from Amritan companies and buy as an American want to be able

to see those jobs continue. If we have to, will go elsewhere, and then we won't come back and those American jobs will go away, and and that's not going to help America and the long term, it's not gonna hurt Walwi and that the strategy you talked about the bigger picture. The strategy is that the US wants to hurt walwih to hurt China because they are afraid of the rise of China economically and militarily. So so that's

really at the heart of it. And so instead of promoting greater innovation technology by America, they're trying to hurt Wally and that's not going to help America visa the China in terms of a long term competition, which is which is very important. That's Wawei Technologies USA Chief security Officer Andy Purty and Jason We've talked to him several times over the last couple of years, and at many times it was with the backdrop of increased tensions between

the United States and China. And here we were again, well in this company in many ways, and technology and intellectual property and national security, they all collide. They all sit at this nexus, and it's such an important thing to understand as we try to find a way forward with China. All right, you're listening to Bloomberg Business Week. Coming up, Jason LeRose of Equinox Media on the pivot to digital fitness and now how the virus is changing all of us when it comes to our overall health.

This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio. We're bringing you some of the most important and informative conversations. Interesting conversations we had throughout the week on our daily radio show. There were so many, Jason, absolutely, and we love talking about fitness for sure. We also know that that business has changed dramatically. Boutiques are closed, big box gyms are closed for the most part as well. So how are people working out? Well, they're doing it, as

they say on the line. We caught up with Jason LeRose. He's the CEO of Equinox Media. They've got a new app and they're learning a lot about their customers. What's interesting, though, is we started on this journey, you know, more than a year ago, and we started on the journey because we knew the squeezing fitness in doesn't always work into a busy schedule. We knew that there were lots of reasons that our members, particularly Equinox, couldn't always make it

to a club. Um, while we had a on list and we were talking with them, we we never anticipated

a year ago that the list would include pandemic. So now we're seeing, you know, more demand than ever for people trying to continue their fitness regimens while they're you know, while they're at home, and we've been been rolling out really quickly to try to meet those demands because you know, our members certainly have been been raised in their hand looking for looking for an opportunity to keep it going. Tell us about what you guys were doing pre COVID

nineteen and what you are doing now, I'm sure. So the vision here has always been to build something that's multi brand, it's multimodality, and something that's in real life and on demand altogether. Um, we believe that there there was space for it, and there wasn't anyone who was able to deliver that in the marketplace. So what we had done is, you know, partnered with some of the very best brands in the fitness space, like Soul Cycle,

like Equinox, to bring great experiences on demand. You know, it's it's great to find those experiences when you make it in real life. What's challenging sometimes is then when you when you get home, sometimes that content can be a little little more underwhelming. And so we worked really hard, uh, you know, to build our own production facility and to bring the best of those brands in real life to

an on demand experience that continues to be true. Um. You know, we spent a year building it, building the technology, building the television studio, building the library. What's changed is really, you know, the pandemic has put us in a position where we've needed to support our members faster, and so we've worked really hard to get out to a much

larger audience faster than we anticipated. And and while we we've always been talking with our members, it's been interesting to see how their workouts have changed in this kind of a world versus you know, a time when there was a little bit more freedom. So how had their workouts changed? And I do wonder because you can see kind of what they're using, how long they're using it for. Are their patterns emerging, Jason in terms of what they like more or less or in greater quantities during this

time than may be they would like during a non pandemic. Yeah, you know, there really have been some interesting things I think, you know. The first one that stood out for me, and this is, you know, this has been a personal part of the journey as well, is is how big meditation has been, uh, you know, the mental uh side of this, um, you know, just the need for mindfulness has probably been been brought to the forefront for many

of us. And so we're seeing amazing completion rates on our meditation classes overall, and it's been super popular and and even for me, it's become part of my regimen, so you know, that's been a piece of it. The second thing is we're seeing a lot more body weight

exercises than we anticipated. Of course, you know, we we thought we would be in a world where our members would be, you know, using access that they have to the clubs along with brus to to provide a complimentary experience when they're when they're in their apartments or their homes and they may not have as much access to equipment. We're seeing more more and more body weight in there. Um. But it's interesting for us also seeing how many double workouts.

We've seen you know, people putting shorter time frames together, maybe a twenty minute workout together with a forty five minute workout and just going back to back, which um, you know, we we didn't necessarily anticipate, but watching some of that that behavior has been, uh, has been cool. And then lastly, you know, running has probably shocked us. Of course, running is a huge modality and people excited

about it. Um, you know, we started Precision Run is a wonderful brand with the studio down on twenty one Street. That's a treadmill based, science backed running running class and it's a really cool place. Um, people have been dying for outdoor runs. You know, left access to treadmills, and people just want to get out if they're in a

place where they can do that safely. And so our outdoor runs, as we've been testing, those have been incredibly strong and and so all those things have been just a little different in this world than we anticipated up front. You know, Jason, I am curious how many of the people that you think are actively engaging with you online right now stay there as they come back also to physical locations, Well, Carol, I definitely agree. Is going to

be both you know, digital and physical world. And I certainly believe that pre pandemic, we had of the members at Equinox who had some form of digital fitness app on their phones already, so they were living in a digital and physical world, and they were using that digital to augment the times that they couldn't make it to a claub or to a studio or something else. So

I think that will remain. What I hope is is that this newfound focus or maybe maybe continued focus on health and well being means that we'll all get into some healthier habits over this time and that those things will stay with us. But certainly we saw that mix of of physical and digital beforehand we expected to continue.

You know, Jason, I wanted to ask you sort of about this mega trend toward a healthier life, because before you got into this gig uh, you ran a big chunk of under armour as president of North America, and you know that was a place where you guys, we're also thinking about sort of the physical and the digital map my run you sort of integrating all of that in and and I do wonder whether this is a trend in your estimation that was happening, and that this

epidemic or pandemic has sort of accelerated, has it changed it? Like what what? What are the sort of contours because this is something you've been watching for a couple of decades now, Yeah, I mean, look, I think it's definitely an accelerant. I don't think that there's much question that this is changing all of us a bit in terms of what our our overall habits look like. But the need for time has been going on for a lot

longer than the last couple of months. You know, we've all we've all struggled for that currency no matter what. And what we find is the more healthy you want to be, the busier you maybe also and so time it becomes even harder to find, and investing it in these things, um, you know, from a digital standpoint just gives you a little bit more freedom for those days that worked novel or a sick child or or you know, just a long day or whatever it might be gets

in the way. And so we we always have seen digital being you know, uh an and solution and not an OAR solution. Um. But but we've we've watched how that's progressed, and I think for us, you know, we certainly happened to be at a moment where we can help more of our members and writers than we thought, uh, you know, in Mayo of two thousand and twenty. So we're fortunate for that. And that's Jason LeRose, CEO of Equinox Media Carol and we both love fitness. We love

catching up with entrepreneurs and managers in this space. We know the world of fitness has changed dramatically. I think the big question which Jason really spoke to is what does it look like going forward now that we have this new channel of source, this new way of working out well, and he answered it right. He said he expects digital as an and solution rather than an or.

And I do wonder about that. I love going to studios to work out, but I also have loved the convenience of being able to open up something online and just do it, you know, in my home, and it be so convenient. So we'll see how much that sticks around. All right, you're listening to Bloomberg Business. We're coming up how the coronavirus is transforming the world of private aviation, calling all private jets. This is Bloomberg, this is Bloomberg

Business Week from Bloomberg Radio. Today, we're bringing some of the most important, we hope informative conversations we had on our daily Bloomberg Business Week radio show. And one of those conversations Jason was with Andrew Collins. He's the presidency of sentiate Jet, and you know, they understandably initially saw drops in service and demand, but now it is back and it's got some interesting new trend lines we are seeing, uh, you know, from a business standpoint, you know, I think

a very interesting time. We saw the reaction to the pandemic in late March, where we saw a lot of our flying volume drop. Uh initially, and I can tell you that walking into April, it originally looked like we were probably about ten per of what our volume projects to be and so that would have been about a hundred legs, and I mean it was an absolute low point. But rapidly we started to see people that started to

think about private jets a little bit different. And honestly, I'm seeing people behave you know, usually this is more about a lifestyle or business productivity tool, but it's almost migrated over to a utility during this time. And uh, what we're seeing are people that want to control their environment. They want to control how many touch points you know, they're exposed to. And so because of that, we're seeing a lot of new entrants, and our volume has come

back gangbusters in May. And you know, I could tell you it's a reaction to the pandemic, but I tend to think that we're probably going to see a whole set of new entrants to flying privately based on this, And so andrews you as you think about this, and you put it in the context of previous crises, both financial and and otherwise, And obviously nine eleven is the comparison that so many people make in terms of the scope of this, and obviously two very different tragedies in

a way. But obviously that was probably the last time we saw travel just effectively go away for some period of time, although shorter uh in duration than you know, how do you think about the future of travel overall? It, especially the future of air travel. So I think that air travel has changed forever. Um. I think that the way that we think about commercial airlines, you know, last year, I think two and a half million people a day would process to the t s A and commercial airlines

in April it was somewhere around nine hundred thousand. So it's an industry that's been impacted, and I'm sure you've talked about it so much, and it's one that is so capital intensive that it feels like it's a tough model to pursue moving forward. I think really truly this notion of control, this notion of a limited environment. I don't know that that's the long term, but I certainly see in the you know, the next twelve to eighteen months, UM, really a focus on making sure people are are at

their least kind of exposed to crowds. UM. As far as the crisis goes, you mentioned nine eleven. Nine eleven is actually when our business started to really, uh to kind of shine unfortunately UM from the incident. But commercial was only down for a little bit. It was also here for the financial crisis, and in the financial crisis a lot of the segment disappeared. This is very different in private. You know, not only did you have a high capital overhang coming in and a robust stock market,

but we were in Q one seeing record flying. So I think the exposure was significant. And I would just simply say that as I watch kind of this, this whole volume increase in our business. It just tells me that people are probably going to consider private, whether that's aviation, whether that's a villa, whether that's some form of you know, a limited exposure environment. I think that's where we are for a little bit. Well that's thought. I was curious

when you talk about the new entrance. Is it folks who are trying to go on vacation because they need a break? Uh? Is it folks who need to go is it business folks? Who is it that that's coming up? And we've just got about forty five seconds here and then we'll come back and talk some more, no problem. Probably about three thousand flying hours this month, if not more, and about three quarters of it is personal, whether it's

shelter to shelter, or it's just change of scenery. But I think some of it's reactive and some of it is people that are moving on a personal level. Business is slowly coming back, but not nearly where we would normally see it. That's Sentient Jet President CEO Andrew Collins.

And you know what's interesting, I thought Jason one of the things he said and he talked to about how they are different from you know, the big major airlines, and he said commercial airlines have something like seven touch points, right, so they need to think about how many people are involved and what that means for passenger safety. He says

they've got about twenty or thirty touch points. So he goes, we already have a big advantage to start from a much better point when it comes to reopening and getting people back flying well. And you do wonder, right if especially and this is at the high end, of course, but if people are traveling less, do their budgets get a little bigger per trip? And certainly for businesses and maybe even for personal travel, is this something that people

start to spend more on. You're listening to Bloomberg this week. Coming up filmmaker at Nancy Spielberg. Yep, she's Steven's little sister. She tells us about the impact of the virus on Hollywood and like our big brother, she's a storyteller at heart. This is Bloomberg. This is Bloomberg Business Week from Bloomberg Radio.

Today we're bringing you some of the most important, we hope informative reversations we had on our daily Bloomberg Business Week radio show and one of those conversations, Jason was with Andrew Collins, he's the presidency of sentiate Jet, and you know, they understandably initially saw drops in service and demand, but now it is back and it's got some interesting new trend lines we are seeing, uh, you know, from a business standpoint, you know, I think a very interesting time.

We saw the reaction to the pandemic in late March, where we saw a lot of our flying volume drop. Uh initially, and I can tell you that walking into April, it originally looked like we were probably about ten percent of what our volume projects to be and so that would have been about a hundred legs, and I mean it was an absolute low point. But rapidly we started to see people that started to think about private jets

a little bit different. And honestly, I'm seeing people behave you know, usually this is more about a lifestyle or business productivity tool, but it's almost migrated over to a utility during this time. And uh, what we're seeing are people that want to control their environment. They want to control how many touch points you know, they're exposed to.

And so because of that, we're seeing a lot of new entrants and our volume has come back gangbusters in May, and you know, I could tell you it's a reaction to the pandemic, but I tend to think that we're probably going to see a whole set of new entrants to flying privately based on this, And so andrews you as you think about this, and you put it in the context of previous crises, both financial and and otherwise.

And obviously nine eleven is the comparison that so many people make in terms of the scope of this, and obviously two very different tragedies in a way. But obviously that was probably the last time we saw travel just effectively go away for some period of time, although shorter uh in duration than you know, how you think about the future of travel overall, it especially the future of

air travel. So I think that air travel has changed forever. Um. I think that the way that we think about commercial airlines. You know, last year, I think two and a half million people a day with process to the T s A and commercial airlines. In April it was somewhere around nine hundred thousand. So it's in the industry that's been impacted. And I'm sure you've talked about it so much, and it's one that is so capital intensive that it feels

like it's a tough model to pursue moving forward. I think really truly this notion of control, this notion of a limited environment. I don't know that that's the long term, but I certainly see in the you know, the next twelve to eighteen months, UM, really a focus on making sure people are are at their least kind of exposed to crowds. UM. As far as the crisis goes, you

met Sho nine eleven. Nine eleven is actually when our business started to really uh to kind of shine unfortunately UM from the incident, but commercial was only down for a little bit. I was also here for the financial crisis, and in the financial crisis a lot of the segment disappeared. This is very different in private. You know, not only did you have a high capital overhang coming in and a robust stock market, but we were in Q one seeing record flying. So I think the exposure was significant.

And I would just simply say that as I watch kind of this this whole volume increase in our business, it just tells me that people are probably going to consider private, whether that's aviation, whether that's a villa, whether that's some form of you know, a limited exposure environment. I think that's where we are for a little bit. Well, that's what I was curious when you talk about the new entrance. Is it folks who are trying to go on vacation because they need a break? Uh? Is it

folks who need to go? Is it business folks? Who is it that that's coming up? And we've just got about forty five seconds here and then we'll come back and talk some more, no problem. Probably about three thousand flying hours this month, it's not more, and about three quarters of it is personal, whether it's shelter to shelter or it's just change of scenery. But I think some of it's reactive and some of it is people that are moving on a personal level. Business is slowly coming back,

but not nearly where we would normally see it. That's Sentient Jet president CEO Andrew Collins. And you know what's interesting, I thought Jason one of the things he said, and he talked to about how they are different from you know, the big major airlines, and he said, commercial airlines have something like seven hundred touch points, right, so they need to think about how many people are involved and what that means for passenger safety. He says, they've got about

twenty or thirty touch points. So he goes, we already have a big advantage to start from a much better point when it comes to reopening and getting people back flying well. And you do wonder, right if especially and this is at the high end of cores, but if people are traveling less, do their budgets get a little bigger per trip? And certainly for businesses and maybe even for personal travel, is this something that people start to spend more on. You're listening to Bloomberg this week, coming

up filmmaker at Nancy Spielberg. Yep, she's Steven's little sister. She tells us about the impact of the virus on Hollywood, and like our big brother, she's a storyteller at heart. This is Bloomberg