ESPN Head on Customizing Content for Younger Viewers

Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. A bunch of headlines out there in terms of COVID. We did see several countries moving toward easing travel restrictions, so that's happening. We see, you know, mask mandates kind of coming off and we're moving forward.

Although I highly recommend you check at the Bloomberg Big Take from over the weekend, it's a reminder we're not out of the woods yet. We're not. Michelle Cortez, who's covered it for us here at Bloomberg News, is just saying, sorry, guys, there are more variants to come, and it's going to be more disruptions to things like supply chains and so on. I read it on the plane back last night and like, oh, Michelle, come on alright, So let's bring in Dr John Abanson.

He's lecturer of health care policy at Harvard Medical School. He's got a new book out, Sickening, a Big Farma broke American health care and how we can repair it. He joins us on the phone from Boston. Dr Abanson, nice to have you here with Tim and myself. Let's get right to it. Your book really strikes at big Pharma. What's your mission here? My mission is too to explain to the American people that American healthcare is performing very poorly.

We've ranked sixty eight in the world and healthy life expectancy, and to achieve that lowly state of health, we're spending a trillion and a half dollars more than the other wealthy countries as a percentage at GDP. So it's a disaster. We've known this for a while, so right like this has been out there, this stat I feel like whenever we talk about American healthcare systems for the last decade, at least, you know, we talked about how much we spend and how much is bad? UM? So so what

do we do right? So what I have to contribute is that UM as a family talk you know, was Robert W. Johnson Fellow and trained in research design and epode theology and statistics. As my career went on, I started to see the commercial influence coming and the missing piece. We talk about these things all the time, Carol, and people are aware of it. Um. It's hard to apprehend

how bad it is. But the missing piece in all this is something that I can contribute, which is that the commercial interests, doing their job to maximize the financial returns that they delivered to their investors, have taken over the knowledge that even the best doctors trust about how best to care for patients. And this extends from their determining the research agenda of our new knowledge is about drugs and devices, to controlling the conduct of the studies,

the analysis of the studies. When the studies are completed and the manuscripts are sent into the journals, that the peer reviewers and the medical journal editors don't even get to see the real data. They just get to see the data that's included in the manuscript. And when the experts who write clinical practice guidelines set the standards for all doctors about what how to practice quality medicine. They

don't get to see the data either. So what we've had is this quiet revolution in the control of our medical knowledge over the last twenty or thirty years. And the docs are trying to practice evidence based medicine, but they don't understand that that evidence the fundamental purpose of

that evidence now is to maximize returns to investors. Can you draw a line from what you're talking about here to the nearly one million Americans who have died as a result of covid um that is our health care system, our health care system, the health of the health of American people, and to the is it billions now that have gotten the vaccine or millions that have gotten the vaccine? Yes? Billions um yes uh? Part of the line uh. The COVID vaccines and are both the height of what farmer

can do for us. And it shows also that their business model of maximizing their profits is not going to work in the end, because what we've done is we have these fabulous vaccines while we pay a lot, the drug companies are making a lot. But fine, But what happened is that there was no UH control on where those vaccines were sold, so they're being sold where the drug companies can make the most money, and the third world is getting left out of this. So Africa has

a vaccination rate of approximately I think now. And what's happening is that Delta variant came from India when four of people were vaccinated. The O wrong variant came from South Africa when ten percent of South Africans were vaccinated. And the business model of the pharmaceutical companies, the vaccine manufacturers is to keep selling their drugs for top dollar. But it's a global pandemic and until everybody's safe, nobody's stakes.

And these variants like Delta and omicron are going to keep coming back to affect Americans and we're going to keep having waves of this as your as Mitchelle, your reporter road. So who do we target? You know, I've had a brother who is in pharmaceuticals for a long time and we've had some great debates go round and round. But I do wonder how do we make it better. You mentioned we spend so much, and I'm very grateful having traveled and been exposed to sometimes healthcare systems outside

the United States. I do know that we are privileged, but not everybody is equally privileged, and yet the costs are extreme and it's sometimes cumbersome and difficult to manage. Just got about a minute left here, So what do we do? What's your top two things that you change that we make it better? Yeah, Carol, there are a couple of things that would would really improve it. One is, we in the United States do not have Health Technology Assessment.

So the FDA tells us what tells us doctors what drugs we can prescribe, but it doesn't tell us what drugs we should prescribe in terms of being most effective and most efficient. So we need an external body that can tell doctors what the data really show about whether new therapies are better than older therapies, um, and what the most cost effective medicine is. The other thing that

we absolutely need is transparency of clinical trial data. It's craziness to be trusting journal articles because they're peer reviewed. When the peer reviewers don't have access to the data, it makes no sense. It takes us. Now forgive me, we're running out of time. Sounds like some things that we need to put front and center. I do hope you'll come back, because I think this is a converse station that we've got to spend a bit more time with us, and and not really even gracious with your

time today. Dr John grab Abramson over at Harvard Medical School. Check out his book Sickening, How Big Farmer Brook American Healthcare and How we can repair It. You're listening to Bloomberg Radio. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. But in the current issue of Bloomberg Business Week, a story about unicorns, you know, the startup companies worth about a billion or more. And as it turns out, Tim

more being minted every day. In fact, some are being their couple being minted every single day in two It's almost like, Joel Weber, we need a new name for unicorn. Joel Webber is at her at Bloomberg Business Week. He's with us in the Bloomberg Interactive Broker Studio. The story we're referring to is by Ellen Hewitt, startups reporter for Bloomberg News. She joins us on the phone from San Francisco. Check out her story. It's featured in the current issue

of Bloomberg Business Week. It's available on the Bloomberg and at bloomberg dot com slash business Week. So what do you think, Joel um a new name for Unicorn because they're not all that rare. I don't know what name

that would be. Uh So maybe Ellen hasn't. But Ellen sent up a flare uh a couple of weeks ago and basically said, we're about to hit an interesting threshold, which is one thousand startups that will be worth a billion or more UM, which I think is a really interesting moment to kind of look back at this, Like, I mean, in the tech world, this has been a trend that has really helped define where where companies go and increasingly where public markets go. Um. And it didn't

take that long for us to get there. Um. So, Ellen, what was the thousand Unicorn? So there's arguably too because there were actually two that became you know, We're born quote unquote on February second, which was happened to be the day that we hit the thousand number. We chose to profile one of them. It was a company called produc Upboard, and I could not have come up with a more inside baseball Silicon Valley company had I tried.

They make software for product managers UM to help them more effectively manage UM product development, which just means like building a new app or a new feature or something like that. And it's it's just like, you know, pms are a big deal at tech companies and this is just a product made for them. They're based in San Francisco. I mean it was like it was pretty funny, UM.

But yeah, I mean, they just it was a huge deal for them, UM, But most people don't fat And I like, as reporters, if we get pitched a company saying like hey we raised money and now our unicorn, like that doesn't move the needle for us at all. So if it wasn't called a unicorn, what would call well,

what's funny is? I talked to um alien Lee, who is the VC who originally came up with the term, and she said, when she was first writing the blog post about unicorns, she was like, I was trying to think of a a term, and I thought of like home run or monster hit or these things that were like pretty cheesy. And I told her, I was like, I as a writer, I'm so glad that you picked unicorn because there are a lot of fun metaphors you

can make with it. UM that helps us up, you know, any sort of article about improvided very memorable art for magazine stories. Yeah, the arts spread is amazing. I really encourage everyone to look at the at the print version. It's it's quite beautiful. Including Actually, I have actually wondered when the unicorn really looks like, because I've never seen one in the wildly. I have this Bloomberg Business Week article in the art associated with it to show me.

Hey Ellen, I'm I'm wondering why these companies are staying private longer. It's just something you explore in the piece um. Traditionally, companies that have been worth so much they would have you know, I p o well. And if you look at the uniform list, so at the time that the term was first coined, which was the most valuable private company that was on that list was Twitter? It was

worth ten billion dollars. Now, if you look at the list, the most valuable unicorns on the list are Bike Dance at a hundred forty billion dollars um, SpaceX that around a hundred billion, and Stripe that I think and I mean, is you know, an order of magnitude above what we used to have less than a decade ago. And you know a lot of the big names that used to be on the Unicorn list are public, like Uber Lift,

you know, Airbnb, We work all these companies. That being said, obviously there's a lot more flexibility for companies to stay private longer. And I think, you know, Stripe is a good example. They've just their ability to raise money is limitless in the private markets. Why would they go public? It's the same story that we've heard people worrying about

for the last ten years. And and the reason you see all these public market investors coming to the private markets, these companies are not interested in going public if they don't have to. They really don't have to write there's so much money out there. So Ellen, what does it take for a reporter who follows startups to get excited, especially when it's not so unusual for there to be

a billion dollar company? And I think about our audience, who is listening when we talk about these companies that hit that billion dollar status. What are the ones that they should be maybe paying more attention to. Is it that nineteen billion. What is it? Oh my gosh, Well it's funny because yeah, now as a result of how many unicorns there are, you are seeing these ridiculous neologisms like umu decacorn a classic, right, so ten billion or more.

But somebody was telling me hecticorn is now in vogue because that's a hundred billion or more. I mean it's it's um or like mega. You know, people talking about mega funding rounds now of like a hundred million or more and funding I mean, the goal post just move farther. And so I think as reporters, yeah, we are looking for companies that stand out for some other reason. Um and I think what's tough is like for the company's perspective, like hitting a billion dollar valuation is a really good

sign that you've built something very strong. This is what the PC's have told me. It's like, I means you you've got a good product, but it's no longer enough stand out on that alone own and especially these companies are really competing over recruiting, so that that tends to be a place where they hope that having this public high or this high valuation that has made public through news reports, that will help but it tends not to help with recruiting. They need to show that they're special

in some other way. And are we going to anticipate in any sort of slow down in these valuations or is the money free flowing right now in Silicon Valley. I mean it feels like it's just been so many years of people saying like, is there going to be a slowdown in the private markets and there, and there really hasn't been. Obviously. You see individual companies that maybe were overvalued, like we work with airines or whatever, and

you see them collapse. But I mean, the trend lines have only been going up, and even when there's been volatility and the public markets, that hasn't usually shown up as strongly in the private markets. And look, covid was actually really good for all these companies, which was kind of surprising too. I mean a lot of them make software, and the more digital our lives become, you know, the

more the more these become valuable. I gotta acorn. That's what I would do, all right, Ellen Hughett, great stuff. Check it out online. It's really gorgeous in terms of how it's laid out. She's our startups reporter at Bloomberg News and our thanks to Joe Webber, editor of Business Week. It's in the current issue of the magazine. This is Bloomberg business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Well, on Friday, Bloomberg Live

hosting its Power Players Summit. Tim and I were there. It's bringing together folks in the sports world. And at the event, it caught up with Jimmy Pittaro, chairman ESPN and Sports content of the Disney Company. Also George Pine, founder and CEO Brewing Capital, talk about meeting sports fans wherever they are and that included the gambling world and social media. Does what you do on social ultimately drive

to other platforms. Maybe people get a snippet of something and then they all took ultimately want to see more. That's that's exactly the strategy. So well, so yes, it does work. I will tell you that this is just

one little anecdope. I was speaking at a conference UH sales conference and we're having this exact discussion, and afterwards, an executive came up to me and said, I just want you to know I have I have two teenagers and they were both introduced to ESPN on Snap and now they're watching first take and get up on traditional television. So for me, that's the strategy. You know, we of course want to be there and will continue to be there on those platforms, but it's a way to grow awareness.

So it's a way to grow affinity and and and get this younger generation just generally excited about ESPN. And you know the other thing that's interesting now is gambling. Well that's sports, right, I mean, thirty one million people are supposed to bet on the game Sunday. Eight billion dollars will be waged legally. By the way, up we have a company called Odds Schegar that it's kind of

a kayak for betting in the UK. We're bringing it to America and in the first three days of New York being live, we did of the budget revenue for the year, so obviously we budgeted it too low, but the gambling as sticky as well. So when you think about gambling, social media, digital media, understanding what people want, you know, the world's world's changing around us. Howes gambling turn into somebody who ultimately goes to ESPN? Does it work?

I mean, well, look so here's wrong, guys. We're in it. We are in the space. We've been in the space for for several years. Disney actually said this week he's bullish on sports, including betting. He is bullish on both. Um, I will tell you we've been in the space. We have content. We have dedicated segments on Sports Center. Scott Van pelt has has his Sports Center where he does a segment called Bad Beats. We have dedicated podcast, we

have a dedicated area on ESPN dot com. We have a ESPN branded studio in Vegas on the Strip um that generates betting specific programming on on a regular basis. We've done the research, and of course we were treading carefully here over the past few years, still investing, but but really looking closely at the data. And what we saw is that Number One, our fans are no longer just okay with it. They're demanding it. They expect ESPN

to be offering this betting experience within our environment. Number Two, and this is really interesting, we didn't see any negative impact on the Disney brand. I mean, for those of you that don't know, the Walt Disney Company owns ESPN. So we've wanted to be careful in that regard to and what we're seeing was it was neutral or positive even on the Disney brand. So because I think people

thought family brand, how could you get into betting? Well, you see, you see all the leagues now, in all the major leagues, In fact, every league you're in, nineteen times more likely to watch a sporting event if you make a bet. So if I'm a broadcaster sports, how can I not do it? Like if they don't do it, everybody else will. They'll be at a disadvantage. ESPN really doesn't. I can say no, no, it's you don't have a choice.

They have to. They have, like he said, he has to be where the fans are, and he has to give the fans what they want. Yeah, we're in a battle. We're in a battle for people's time. We're and we're not just competing against the traditional sports media companies. We all know this. We're competing against Instagram and Snap and Fortnite and Netflix, and so we have to be aggressive here. Now that being said, my job is to protect the

brand at all costs. And if I saw any data that that that indicated to me that that this was a dangerous position to be taking we wouldn't do it. Even if there was financial upside, we wouldn't. We wouldn't do it. I have to protect the brand. But we're not. We're just not seeing that um any worries about the integrity of sports in general, especially as we know it's teams getting in right, the league's getting in I mean, everybody is really kind of all in when it comes

to betting and gambling. Well, you know, around the world, they've been doing it for a long time without really any issue. I mean, there's always an inititive integrity. But I would argue you had that whether it was legal or illegal. I mean, one of the things we're finding is that legal bettings way up makes sense. I'd rather make a legal bet than an illegal bet, right, So if I don't have the choice to make a legal bet,

it's probably better. But no, we I don't. I don't think there's any evidence that it's been a real issue. I mean, in Europe they've been betting for quite a long time. Yeah, And look, one of the somewhat connected to that. One of the things that we bring to the table, I think is is our brand, which represents trust a certain level of credibility. So anyway, we see opportunity here, but of course we're going to do it responsibly,

right and just tread carefully and go slowly. One of the things you see the leaves, which I think is really smart to that point, is talking about doing advertising the NFL about responsible gaming. I think that's one of the learnings that wasn't done well around the world, and you see some of the countries of increasing regulation, and I think the leagues here in the US they're trying to get ahead of it by initially bring up do

this responsibly alright. That, of course was Jimmy Pittaro, he's chairman of ESPN and sports content for the Walt Disney Company. And George Pine, founder and CEO Brewing Capital, who has three generations in his family who have been involved in the NFL. So I'm really cool individuals to talk about what's going on. Not the first time I've heard that engagement metric about the likelihood of you actually watching an event. It goes up significantly if you end up betting on it.

And of course the leagues are gonna want to get involved, But how do you keep it pure? Carol, integrity right, integrity of the game signs in locker rooms, videos, trainings. I don't know, I don't know. And I think of Brian Flores, the former of Miami coach head coach, his lawsuit. Uh. And part of the concerns, or at least claims or allegations were that the owner you know, was offering money for him to lose games, right to improve other position in the draft. But so you just rose. I don't

know what to say. Um, but everybody is all in when it comes to gaming, and and these guys just talking about wanting to be wherever the fans are. Truly it means multiple, multiple platforms. Check out more, go to Bloomberg Live dot com. Yeah, but you let me drive? No? No, all right, please level, I want to drive. It's a good question. Drive drive to the globe. Dawn on radio?

All right, just about ten minutes left in today's trading session, getting ready to wrap up this Valentine's Day of trading. Now a little love on Wall Street. In fact, it's a pretty volatile relationship. I like what you did there, Carol. Have you been waiting a year to say that? What would have happened if stocks are in the green today? This is what happens when you get no sleep, Yeah, exactly.

All right, let's get to it with Michael Sheldon. He's executive director and chief investment officer at High Tower r d M Financial Group based in Westport, Connecticut, and that's where we find him on the phone on this Monday. Michael, how are you good? Thanks very much and happy Valentine States everyone in our viewers. Yeah, no, absolutely, it's been

a wacky day. I was just looking at some of the swings in the major averages, like two percent on the NAZACK one hundred, about one and a half percent on the S and P five. Um hmm. How do you make sense of a day like today when we're watching the tensions the geopolitical concerns involving Russia and Ukraine and the rest of the world. But we've also got

some nervousness about how aggressive the Fed. Maybe, yeah, I think from the markets unfortunately, we're probably going to be in the sort of trading range and markets are likely to remain unsettled for for the near term until we have more clarity on on the outlook for inflation shifting FED policy and more recently the situation in Russia. Russia and the Ukraine. What do you make of the situation

in Russia and Ukraine. Because we had Christina Hooper from Investco on Quick take Stock earlier today and she mentioned that oftentimes geopolitical shocks like this are relatively short lived in terms of effects to the markets, but she said this one could be different because of the impact on oil. Yeah, I think it's certainly a wild card. It's really tough to figure out what Putin's intentions are at this point. Um, he could just be trying to cement his legacy as

as a dictator or leader of Russia. You know. We look back also at a number of geopolitical events going back as far back. Ash's looked at about twenty five of these and granted each one is different, but what had showed is that on average s D S and P five hundred fell about one point one percent on the day of a j geo political event, and it fell a total of about five almost five percent over the next twenty days, but eventually recovered its losses over

the next forty three days. So most of these events have been fairly limited with the market rebounding, and of course each period is different. Russia is a pretty big player here. I think they supply about ten percent of the world's oil, and they also supply about one third of Europe's natural gas. So the implications of what happens UH certainly could be far reaching, probably more so for

Europe than for the US. What's more problematic the geo political concerns, the reminder that the pandemic is far from over, and it's a global pandemic and until the world is out of it, none of us are out of it. Or is it that fundamentally? As our Gina Martin Adams reminded us that we are seeing analysts bring down their expectations for earnings, but yet we're still looking for a

nine revenue growth, which, as she said, still fantastic. What is the thing investors really need to be focusing on, Well, you left one thing off your lip, which is the FED. And I think at the top of the list is the FED right now. The you know, I think that because of concerns about the level and stickiness of inflation, that's put pressure on the FED to finally start raising interest rates and um a short term after that they're

likely to start QT. So I think there's a lot of uncertainty about the pace and timing and ultimate destination of what's going to happen to the short term rates. And I think importantly the Fed's aware that the yield curve is narrowing. That's the that's the gap between two year and ten year yields, so the yield curve is narrowing. I think the Michigan Consumer Compidence Index, for example, which came out last week, fell to an eleven year low.

And I think FED members are aware of the fact that if there are too many aggressive rate hikes, that can actually harm the economy. But they are also aware of that inflation is that at forty year high, So I think they have to address the inflation part. But I think they're probably going to start off with quarter point hikes and see how things go and remain some and and continue to have some flexibility as we go

through the year. So do you anticipate a quarter point hike in March and then a quarter point hike at each subsequent meeting. Well, we have seven more rate meetings this year, so I think a quarter point in March. I think not enough FED officials have signaled their um likelihood or their need for that they're wanting to do fifty basis points, so I think that's a little too aggressive at the first meeting. That could change, but I think a quarter point in March, probably a quarter point

in May, a quarter point in June. That's seventy basis points, and I wouldn't be surprised to see one or two more in the second half of the year. But again, I do think the economy could change as we shift and go through the year. So nothing is written in stone, but the Fed does have to start taking action, and I think they also definitely have to address their balance sheet, which increased from about four trillion to nine trillion, so I would expect that to start running off as well

as we get into the summer. So what do we do as an investor? As you watch, especially markets kind of bounced back and forth. I mean, we went through a day earlier where travel stocks are rallying as a as a whole on expectations of easing of attentions over in Russia and Ukraine, and then we saw them sell

off and then do just bouncing around. It's really you know, your day may start one way Michael and then end another or go through several gyrations in uh, you know, one market day Yeah, they're challenging time to be an investor for sure. We think this year in two thousand twenty two, markets are likely to be rotational in nature and sort of a lot like we saw last year, where at some point people would be worried about too much inflation as they are today, but down the road

they may be worried about not enough growth. So I think between growth and value. I think you want to have a balance between both growth and value, especially with

interest rates rising right now. We've been very much overweight growth over the past decade or so and it's turned out pretty well in terms of a tail and for portfolios, but on the margin, we're starting to shift more, a little bit more to the middle between growth and value, and I think you want to have a little bit of more, a little more more balance in your portfolios as we go through this year. So what does that look like? What was it? What does balance look like?

So balance means you want to have some technology in your portfolios, because there's some exciting areas and artificial intelligence and five G and drive a less cars and all those types of things. So you want to have that and that provides the growth for that that investors need to meet their long term investment objectives. But you also need to have some exposure to areas like health care for example, which we call it sort of like garp or growth at a reasonable price, and then some energy

and financial exposure as well. So the one areas were not sort of loading up on right now are consumer staples and utilities because we think it's kind of too early in the cycle to get ultra defensive at this point, and it's not a lot of attractive growth in those in those sectors. All Right, we gotta run. Hey, Michael, thank you so much. Have a good week. Michael Sheldon.

He's executive director and chief investment officer at high Tower r DM Financial Group, based in Westport, Connecticut, which is where we found him on the phone on this Valentine's Day Monday. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube. Search to Bloomberg Global News