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Today, we'll look at how Boing seven three seven Max crisis is weighing on deliveries.
Plus we'll talk about how many countries are building their own killer technology based on Iranian designs.
But first we dive into big tech and Apple. We heard that Apple assembled fourteen billion dollars of iPhones in India for the last fiscal year, doubling its production.
It's a sign that Apple is accelerating a push to diversify beyond China. So for more we were drawn by anirag Rana Bloomberg Intelligence technology analyst, and we asked Aniraq why Apple has been cutting its reliance on China.
One of the things we have seen that over the last two and a half three years, Apple has been assembling its phone outside and you know, for us, the real reason for that is a couple of years ago, there was a COVID big issue in China. It had an impact on some of the phones coming out, that had an impact on sales and so forth. Now having
said that, that was one reason. Second Apple, prior to the you know, you could say the COVID issue was completely dependent on China for all the assembly and their pots. Now what we are seeing is they are moving out of the assembly from China into other eights, mostly India. But one of the things I tell everybody at the same time, they still make most of the parts, so it's you know, if we ever get into a problem with China in terms of geopolitical issues, we still lean
those parts to assemble the phone. It's not as if you know, those parts are available all over the world, an rag.
I just wonder how you know investors in Apple view this China risk? Are they of the opinion I assume that if they own stock in the company there they have some level of comfort with the China risk here? Did they just believe it's hey, you know, it's kind of a mutually beneficial relationship Apple and China that at the end of the day, that's what's going to keep everything moving.
Well, I've seen two people, I mean two different buckets. One is, people are extremely concerned about the US China relationship in the long run. They obviously have you know, they don't want to deal with Apple or any other companies that you know, fall into that bucket. But the others said, listen, this is spart and parcel of the global world chain, supply chains, and most manufacturing companies are
dependent on China. Like it or not. They seem to be okay with it, you know from our side, you know, yes, absolutely.
The biggest risk that Apple faces from a stock point of view, from a revenue point of view, from a supply chain point of view, is if something happens between the US and China, and we've talked about that quite a bit, but from a sales point of view, I think it is to me that's a bigger issue right now in the medium term, because China accounts for eighteen to twenty percent of total of Apple sale and frankly speaking, that is the big growth engine, and we have seen
over the last twelve months of problems in that growth engine because of huahweh.
How much do they make these phones for in India versus China versus other areas, and trying to get a sense of where the margins are and what they look like.
That's a very good question. And frankly speaking, we thought when they started making more phones in India or we started seeing new phones coming out of that, that would have an impact on their gross margins. But they have managed it very well. And remember one of these things, it's the fact increase that they outsourced their stuff to and you know, it's kind of somebody else's headache. But in the end, you know, Apple will have to make
some you could say, concessions. But at the same time, so far we have not seen any impact on Apple's gross margins. I mean surprisingly we have seen them you know, hold up very nicely over the last two years.
Can you just kind of characterize a competitive landscape for Apple in China visa the Huawei and other phones here are they maintaining share, losing share, gaining share? How's Apple doing?
So?
Apple has not done the same number of sales as Wawe over the last twelve months. Now, there are two elements of it. One is the competitive landscape. People are choosing Chinese phone so over a foreign brand, So that's
one aspect. The second aspect, which I'm hoping is probably you know correct in the long run for Apple's sake, is that Wahwei didn't have a very you know, brand new phone for several years, and this is their first big new refresh, which is why people who have been using Quawei phones in the past are going out and refreshing their phone at a much faster clip. So that could be the second reason Apple is it doesn't have that same you know I would say, I mean, the
cache is still there. But typically what I would do is if I have an Apple phone, you know, I'm doing everything on it, you know, chat and the pictures. But in China, what happens is you do a whole lot of your transactions using the apps that you have or the super apps, and for that you can download those app in any ecosystem. So I would say, on a on a you know, competitive basis, you are less prone to be an Apple customer than you are in the Western world.
Well that's interesting. So and then to that point, is that what the regulation or the penalties in the EU and the US is going to force Apple to do an essence, so it won't become that ecosystem in the same way.
Well, there is no super app in the US that is very much like v chat. I mean you could you could say WhatsApp could be one of them. But frankly speaking, I mean Apple's done such a good job of uh you know, I would say, maintaining their customer base in the US and in Europe. That I mean, I don't I don't see that happening. That certainly a new app comes in and people start using that over what's going on with Apple or the habits that they have right now.
So what's the next catalyst now for Apple? What are you looking at? Well, any catalyst I guess would.
Be a big ate the tune I mean that's it's Tune's Worldwide Developers conference where they are supposed to talk about AI and what's a of Apple's AI strategy. That is the only thing that can actually put some fire in this because other than that, I mean, we don't see China bouncing back this year. We don't see any major new product announcement, and obviously Apple Vision pro is not going to drive the overall growth rate of the company.
So it's the iPhone and if there is anything that's out there that can force Paul to go out and buy a new phone, I think that's going to drive the next cycle.
Our Thanks to anor Ad Rana, Bloomberg Intelligence technology analyst.
We next look at the Bloomberg Big Take story titled Iran's Better Stealthier Drones are remaking global warfare. It's about how countries from Central Asia to South America are building their own killer technology based on Iranian designs, and the tech often has US components.
For more, we were joined by the story's co author Sheridan Prosso. She's a Bloomberg News senior investigations writer. We first asked Sheridan what she learned from her investigation process.
We took a look at how US technology flows are going into Iran's drone program, and what we found is just an incredible proliferation of Iranian drones now spreading throughout the world in ways that surprised even me from when I first started looking into this. You know, we obviously know about Iran's drone proliferation in the Middle East contexts right through Syria, I Rock, including now into Yemen, and then in the Middle East, you know, conflict in Gaza
now as well. We're seeing kind of use of Iranian drones in the periphery of that conflict as well. But what also was surprising to us we found is that, you know, Iranian drones are now being manufactured in Russia. There's a program for six thousand Iranian drones there that are starting to turn up now in the battlefields of Ukraine. They're increasing proliferation in places like Central Asia and in South America as well, So it really is quite an enormous spread around the world.
How is the technology, How advanced is the technology is just a model airplane with a lawnmower engine on the back or are they going something further?
It essentially is, and really it's fairly low tech. But what's been really successful about these programs is that they are increasingly developing them and learning from experiences on the battlefield, for example in Ukraine. So what is now believed to be the case is that Iran learned from the way that Iranian drones were now being able to get into Ukraine had increased their effectiveness in the Middle East context.
So it's increasingly battlefield experience and more and more use of these drones that are allowing them to make more deadly str actually and in these conflicts we're seeing them, especially in the Red Sea. And also there was the particular case of the three servicemen who were killed in Jordan earlier this year. It was a fairly low tech small drone, but what it was able to do is we learned in the course of this reporting that it was kind of drafting in behind a US drone that
was attempting to land at the same time. And those drafting techniques are something that they've been working on improving in the Russian and Ukrainian context. So this kind of learning growing, proliferating using low tech technology but actually improving its effectiveness is actually proving very deadly.
What can we do about this.
So the US has export controls where we try to stop US technology from going into these drones and into the manufacturing of these drones. The issue though, is that Iran in particular has become a master of circumventing over forty years of sanctions, there are very developed network where front companies from all over the world are able to
acquire this low tech technology. A lot of our export controls are aimed at stopping sort of the higher end you know, chips now going to China for example, for their AI, but in fact the proliferation of kind of lower tech you know, you need like maybe a few hundred low tech chips, the kind that go into your you know, lawnmower or blender, any kind of regular household equipment. That low tech stuff is actually what's powering the drones as well. And a lot of that is just available.
It's recycled from old products, it's available from suppliers in Asia. China in particular has not been willing to enforce our US export controls against Russia, for example, so there's actually a very big loophole, particularly in Asia, for US tech flowing now into Russia into I runs drone program in Russia. So there are a bunch of concerted efforts now to try to make that stop.
Sheridan, do we know how effective these drones are.
So they've been very deadly in particular instances. What we've seen is a halt to I forget the percentage, maybe more than fifty percent of shipping in the Red Sea has been halted by some drone attacks. In the past few months. We've saw the deadly attack in Lebanon and several other very effective drone strikes as well, and so it's really cause for alarm in Washington. You know, we're wondering how far this is going to go, how effective
our efforts at stopping it are going to be. You know, we're considering kind of how do you actually get US
companies to stop allowing their technology to go there. And the companies that we talk to, for example, Texas Instruments, Analog Devices, a lot of their staff at least eighty percent of the drones that are turning up in Ukraine or containing this US technology from in particularly these companies and a few others as well, how do you get that to stop and therefore decrease Iran's ability to proliferate and that's the biggest question.
Right now, what did those companies say.
The companies say that we buy by US export controls, we have our insisted our suppliers do so as well. The issue is that there's so many loopholes, and in particular Hong Kong is proving to be a very difficult place. It used to be maybe ten, twelve or fifteen years ago, we had much better relations with Hong Kong. They would
have been a lot closer to Western interests. And now with the changes that have happened in Hong Kong in the last three four years, we have seen less willingness on the part of Hong Kong officials to actually enforce US export controls, particularly going towards Russia, and so we've seen a big uptick in proliferation from equipment going via
Hong Kong into Russia, for example. It is much better though at enforcing UN sanctions against Iran, and so it has successfully stopped a lot of technology going to run. But still there are quite a few kind of leaks in the dam basically, so it's happening all around.
Our Thanks to Sheridan Prosso Bloomberg News senior investigations writer.
Coming up, we're going to break down my Boeing seven thirty seven Max crisis is weighing on deliveries.
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We move next to the aerospace industry and Boeing. This week, Boeing log the lowest deliveries in the first quarter since mid twenty twenty one, and it shows just how far the planemaker has to go on its road to recovery from a near catastrophic accident early in January.
For more, we were joined by George ferguson Bloomberg Intelligence, senior Aerospace, Defense and Airlines analyst. We first asked George what the latest quarter means in terms of deliveries for Boeing going forward.
For the year, I think this is going to be the bottom. So i'd expect this was the worst quarter. You know, the fa was in there doing their review of Boeing's manufacturing. Boeing's got to come up for a plan for the FAA. Imagine that takes some hands as well, and manufacturing probably isn't moving very fast while they're in the middle of this process of figuring out how to stabilize,
you know, the production of the airplanes. And so I think for the year, this will be the worst quarter, and I would expect that things would get better second, third, and fourth into the end.
Of the year.
There's a couple of ways to break it down, so let's just take it maybe piece by piece. First of all, supply chain stuff that like Boeing will be a part of and Airbus will be a part of too, Like, how are the supply chain impacting their deliveries?
Well, I mean, right now, I think the biggest problem is up at Boeing and not in the supply chain.
So the supply chain stuff is fixed, No, not at all.
So I meant for the number of deliveries we've seen this quarter and the constriction in that number of deliveries. This is all Boeing issue, right, This is all Boeing's FAA review, their manufacturing review. Their supply chain, I think is producing at at a higher rate than they are right now. So Spirit Aero Systems would be an important
part of their supply chain. They're building somewhere around thirty eight or they were building around thirty eight seven thirty seven Maxes a month when we heard from them at the end of the year, you know, for their four Q earnings call. We understand from Spirit that their suppliers were even building at higher rates than them in some cases maybe even up at sort of forty two numbers. And they're already thinking about Spirit moving to a forty
two number for the Max. Again we're talking Max, which is the highest volume airplane. They were talking about Spirit moving to a forty two number just prior to the Alaska door panel incident, and that's when everything sort of hit the skids. But I think most of it hit the skids up at Boeing, which has to do manage all the FAA, you know, inquiries and their manufacturing review.
George, if I guess from the company I don't want to go too fast. I think, you know, I can't have any more mishaps here. Almost like if I'm an investor, I'm not sure I'm knocking on the door saying, hey, you guys can't get back to thirty eight or forty kind of do it when you can kind of thing.
Yeah, I mean, do it when you can. But I mean in the long term interest of Boeing, they have to increase build rates here and that's going to drive better cash flow and better products. Okay, I mean, look, their competitor across the Atlantic, right, which has, by the way, has you know, final assembly facilities all around the world, including one in Mobile, Alabamas.
Really Airbus has a thing in Mobile.
Absolutely, wow, absolutely, I don't know so. But their competitor is operating up in the forty five range per month for their A three twenty, the major competitor. If Boeing wants to be in this business long term, they have to stabilize production. You're right, but they've got to stabilize it at much higher levels. Prior to the pandemic, they were going close to sixty a month for the seven thirty seven max. It can be done. Their job is to make sure it happens.
So what's the timeline here? When do you think, like year end, where would you like to see them?
So year end, what we've model the Bloomberg intelligence is we think Boeing will be building thirty eight seven thirty sevens a month by four Q, which should have been where they started this year out at thirty eight. We think they were looking to break to forty two by the end of the year.
So do we ever get back to the sixty? Should they ever get back to the sixty?
Well, I mean, if you again, if you look at their competitor, their competitor says they're shooting for seventy five a month on the A three twenty. So if their competitor is breaking to those kind of rates, when you break to higher rates on your primary narrow body, you have the opportunity to go out to your customers and non customers, people that might be upset at Boeing and
sell more airplanes. Right So, right now, what we're seeing is, you know, United has expressed an interest in A three twenty One's airbus is sort of constricted again, They've got you know, the backlog is full. There's airlines that want all those deliveries for the next number of years. We've seen Jet Blue pop up and Spear Airlines pop up and say, hey, we might be willing to give up
some of our airplanes. We think that's a function of Airbus going out to those customers saying we have another potential customer that would like a three twenty one's do you definitely want everything you've got in the books for the next couple of years.
This might be a very silly question, but how do we get to the point where we got two airplane makers? And how does that make sense?
This is not volume like automobiles, right, you sell right? I mean a good year in this business is what a little bit over one thousand airplanes a year? Right, So it's not necessarily an industry that would support five or six manufacturers with the right pricing and you know, in the right margins. And then you've got to put money into R and D and into development while you're you know, so you've got to earn a decent return so you can invest for the future. We did have
more right in the US. We had Boeing, we had McDonald Douglas, Lockeed used to build a commercial aircraft, but you know, I think over time it's slimmed down to where you could make them profitable. And at the same time, airbus was growing in Europe because the Europeans wanted to be in this business. Right, This is a is a good margin, strong manufacturing kind of industry which really supports great jobs. They were rising and that meant some of the US manufacturers had to go away to create room
for a European competitor. And what we have in the horizon someday, I think it's probably five or six years away at least, is the Chinese that want to be in the business. So either the pie has to grow even maybe fifty percent larger, or someone's got a dwindle in that whole thing, right.
Our thanks to George ferguson Bloomberg Intelligence, Senior Aerospace, Defense and Airlines analyst on Bloomberg Intelligence Radio, we bring you all of the top analysts providing in depth research and data on two thousand companies and one hundred and thirty industries.
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Now.
This week we looked into the topic of electric vehicle charging and how EV charging companies have struggled to make a profit.
We talked with Ryan Fisher, Bloomberg BNFEV Charging team leader. We first asked Ryan, who the big players are in EV charging?
Yeah, so some of them maybe not quite household names yet, but you've got charge Point in the US certainly people may have heard of, and the sentiment was pretty positive a few years ago, stock prices up and.
Then everything has kind of crashed down.
Sentiment not so great, as some of these companies have not met the targets that they might have done. But what we're starting to see the few companies that you definitely won't have heard of actually have started to post some positive profit margins. So there's like fast charging manufacturers in Europe call Ken Power, making the kind of units that concern big power to evs and charge it fast. And then you've got some of the ones who do
the slower power units as well. And then also you've got a couple of these companies that you may have heard of, like ABB, producing chargers as part of a portfolio so they're selling transformers and they're sort of using that as somewhat of a way to get into companies and sell some of their other products that they've got and add it on as an additional So lot's going on on the high were side.
And then you've got operators.
So these are like the companies who basically will sell the electricity to charge a vehicle. You kind of think of it like filling up with petrol. And none of those so far are profitable, but we have seen some good signs so some of those being a bit dar positive now fast Ned posted that which is a Dutch
one the other day in the US. Unprofitable so far, but there's a company called EVgo you may have heard of, who has these fast charges and they actually basically delivered one hundred and ninety one percent more energy in twenty twenty three than they had in twenty twenty two, So good progress there.
So Ryan, where are we kind of, I guess on a timeline of kind of getting enough charging capabilities into the system that can really support, you know, a wide adoption of evs. It feels like we've hit a speed bump here. What's the timeline? Do you think when you talk to folks in the industry.
Yeah, it's an interesting one because we cover the global market. So you look at China and they installed about a million of these public charges last year, and the US did sort of low tens of thousands. So there's a big difference depending on where you are in the world. I think the US and Europe are more similar in how they'll play out, and Europe is maybe just five
years ahead. So Europe has got actually loads of competition at the moment, and the story a little bit when we look at this is some of the companies looking like competition is starting to weigh on the demand that they're delivering because it's a bit monopolistic. So I want the best land as a company, and I want the best grid connection, and I want that to be somewhere that people are going and somewhere where people can buy things.
And they're realizing that, well, the demand isn't quite there yet. But if we believe in the long term trajectory of vvs, let's get in this business, let's get those spots. So we've seen that in Europe, and I think the US is just starting to tick over. The US has been hugely dominated by Tesla. So if you look at Tesla on the vehicle side, kind of eighty percent of these pure battery electric vehicles five years ago kind of Tesla's and then they also provide the supercharging, and that's kind
of pushed all the competition out. But what we saw last year was some of these other automakers really producing the evs and therefore providing a market for other people to come into.
This is a super dumb question. Where does a charging operator get the power to then enable me to put a Tesla into that network.
There has been a lot of these companies that are going out and they're saying, you know what, instead of putting two charges in at my petrol station where the power exists, I actually now need kind of twelve chargers. And in some cases, when you look at, for example, the Tesla stations, they've got like one hundred chargers in one spot. Now that becomes a big grid connection. The
next thing is charging the trucks. So this could be like the same amount of power as a town, and a lot of the utilities are taking too long to do it. So it's like that how long does it take to get a permit? How long does it take to actually get energized. Can you make the agreements with the land, Lisa, All of this has kind of slowed it down, but clearly industries trying to work together, and this has become a big topic for the automakers and the utilities as well.
Some of them trying to sign contracts on sites.
So if you imagine these companies small fry like several small meters across multiple places, the utility is maybe not so interested in that, But now they're actually delivering a lot of demand. So as I say, looking to other markets in the US and China being a good example, the public chargers in China now deliver more energy than the whole of Ireland.
So a lot of energy.
And therefore that becomes interesting because if you're an energy developer and you're doing like solar on site next to it with a battery, and we've seen what EV, which is one of these truck charging companies, basically build a station that's not connected to the grid at all. It's just got straight to the solar and a battery. So cool innovations going on there.
Hey, Ryan, Here in the US, EV sales have slowed materially and a lot of people are trying to think there's a combination of reasons, price being a big, big one, but one of those drivers is the lack of a fully ubiquitous charging infrastructure. When you talk to your EV companies, how did they think about it? Are they concerned about the long term demand of EV's in general, and if so, do they feel like they could be part of the solution there?
Yeah, and there's definitely kind of differences in opinions. The US hionde CEO saying something along the lines of today, why buy an EV from an automaker who's lobbying against EV's, And obviously he's talking about the US there. But you do see a difference in those that are kind of in on it and those that aren't. And I think some who aren't have previously been so they've they've committed billions, they talked about targets, and then they're starting to row
it back. And some of that is maybe because the technology is behind they can't do it as cheap as everyone else. So there's different reasons. And I think when you look at liabilities, I don't think that's talked about enough. Actually, some of these companies have put cars out there and then the batteries had a problem and they've got to recall it.
And that could be multi billions.
So I think there's some caution as well in saying why don't we put a few less casts out because because then we can learn from them and we can do it later. Some of the narrative has been they're not putting the cars out because quite physibly, like the battery.
Operations are up and running. But I think there was other reasons.
Our thanks to Ryan Fisher, Bloomberg BNF EV Charging team leader.
All right, coming up on the program, we're going to break down how beer sales did last quarter at Constellation Brands.
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We move now to the beverage companies Constellation Brands. So the company reported fourth quarter earnings per share of the beat analysts expectations, and this was the result of better than expected beer segment sales and a wider operating margin.
For more. We were joined by Kennis Sha, Bloomberg Intelligence Senior Consumer products analyst. We first asked Ken for his take on the company's earnings.
So the quarter, you know, I think the backdrop, first of all, was for a slow quarter, you know, for most wine and beer companies right now and spirits. We've been given some recent results from Brown Foreman and a duck Corn portfolio. They're a producer of wines. Well, they're all saying, you know, trade inventory reductions stemming from cooling demand across all alcoholic beverages was kind of the backdrop to this earnings report. So when it came out, it
beat expectations. Beer sales were up eleven percent, white and spirits were weak. But again, this is mostly a beer company, and so that's why it was perceived very positively because you know, this was a dose of good news and otherwise very cautious market. So the company is doing basically what it said it would do. You know, it had good results for beer, a reduced debt some more, it's committed to expanding its big brewery operations down in Mexico,
increased the dividend thirteen percent. So from a shareholder point of view, they're doing the things they said they would do, and the beer results beat expectations and that gave the market a dosa good news.
What's Constellation saying about the consumer in general? Because you know, there's a lot of concern out there as we look at some of the big data coming out of Washington, DC about the consumers is inflation and all that type of stuff. What are they seeing?
They look at the paper also, they understand, you know, the environment that they're in that the consumer has definitely turned a little cautious here towards purchases that they can differ. I guess that's the best way to put it. You know, beer is, you know, a relatively low price point product visa the wine and spirits. You know, a high end bottle of wine or high end bottle of bourbon you can maybe put off for a while, but you know, a bottle of beer or even a six pack whatever.
You're not as prone to do that. Even though Corona Medelic, you know, command a very premium price. It's a premium product. So they're aware that they can't just keep you know, tacking on big price increases. They're aware of what's going on, but they see the consumer is resilient, particularly for beer right now.
So Ken, when we get you on, we like to talk about all the things, and one of the things we like talk about is we because you walk on the street in New York City, you get the wafting. I mean, I think it smells good.
Well, clarify this that Ken covers the cannabis. It's not that he is.
Maybe I did not frame this correctly. Ken, you're an analyst that also covers the cannabis stocks. When I walk around in New York City, I smell a lot of cannabis products. How are these companies actually doing well?
Alex are doing pretty well from a sales point of view, from an EBITDA point of view, but you know that the taxation on cannabis companies is so onerous and a lot of not very many are profitable from a gap account point of view, if you're an investor in this market, you certainly have to be patient, and that's because you need some help from regulators from Washington, whether it's a reclassification from you know, a prohibited drug like marijuana is
considered today, or it's outright legalization in some states and so on, So you need some help from regulators to keep this thing going. So it's going in a saleser from an industry point of view, are moving positively as more states legalized, you know, Florida, it's going to be on the bal Florida as it could be a you know, a six billion dollars legal market or about three times the size that it is now in a very short order if in November voters approve a legalization for adult
use in November. So it's moving positively, but again from an accounting point of view, you know, it's not looking as rosy all right.
Thanks to Ken Shay, Bloomberg Intelligence and your Consumer Products Analyst. Also this week, we were joined by Jason Kelly, chief correspondent for Bloomberg Originals, and former baseball star Alex Rodriguez. They host a new podcast on Bloomberg called The Deal with Alex Rodriguez and Jason Kelly. In our interview, Jason and Alex discussed how sports are consumed live, the state of New York, Yankees and playing in New York, and
what is happening in the ranks of college sports. But first we asked Jason about some of the deal making in sports that really stands out.
Dial made some money on the Phoenix Suns when they were sold for four billion dollars a couple of years ago, so that's been one exit. I mean what's interesting is so Sixth Street. Just speaking specifically about Sixth Street, and you know this is started by Alan Waxman, former special situation said for Goldman Sachs was in a partnership with TPG. You know, so they've invested one hundred and twenty five million. They let an investment for one hundred and twenty five
million dollars into BAFC. I mean that's real money, paid a record franchise fee fifty three million dollars just to buy the team. I mean they're looking at a scenario where they can get a five x ten X. I mean, this is a long hold. So the franchise values, as Alex just demonstrated, think about I mean, Jerry Jones bought the Dallas Cowboys for less than two hundred million dollars in the late eighties early nineties, which, by the way, they said he was insane, that that was a crazy amount.
This is a franchise now worth nine or ten billion dollars. Alex, let's talk about ownership.
You're part of ownership group for the Minnesota Timberwolves, right talk to us about that experience, and I love you to talk to about My personal opinion is I'm concerned about the evaluation of franchises. I'm concerned about salaries because it's all predicated in large part on broadcast rights. Yeah, and with cord cutting, I'm not sure ESPN's going to continue to write these crazy checks. So talk to us about kind of had what you've learned about as being an owner there.
It's funny because one of my good friends and mentors of Magic Johnson, and of course he played basketball for a long time and he owns a baseball team, yep. And I played baseball for a long time and I'm part of the ownership group of the Minnesota Timberwolves and the Lynx. You know what I think is there's no question that the giant in sports in America's NFL, right, and to think that, you know, almost twenty million people
watch Kaylin Clark. Those are NFL numbers on Sundays. I mean that's the number one driver for all sports and which creates a lot of people to be very bullish in women's sports. But going back to well, we have the links as well. But I do think that the NFL and the NBA are global sports. Especially the NBA. It's growing year over year. If you look at social media as an example. As a metrics, we're almost ten to one to the NFL. We're almost fifteen to one
to Major League Baseball. So Lebron, James, Michael Jordan, Steph Curry, these are global names. I think that is going to be a different landscape. But you'll have more contributors. Maybe you have NBC pop in Amazon, Apple, there's a lot of suitors. It's not going to be the traditional So ESPN may not write as big as check, but is there. I'm not speaking for the NBA. I'm just giving you my opinion that you may have a world where NBC
may split the finals with ESPN and ABC. So I think you'll get to a similar result just a different way.
So you said those words, and I knew those people, So I feel like I'm not qualified ask this question. But then for someone like me who's a newbie who maybe wants to watch some stuff like I'm I don't know, I would I need like a spreadsheet to like find out like what's playing where or when what time, like Amazon Prime, Netflix, something like that. And I wonder if that's going to be a hurdle. Jason, what do you think to like? I mean, it could be.
I mean, and Paul knows this space better than anyone. You know, there's been sort of a fracturing, but now sort of a reconsolidation. It feels like of how we're going to consume sports. I mean, you've followed this for years. You know that live sports. Alex knows it from being on television and being broadcast himself. People love live sports and that it's one of the only things that actually
keeps people coming back to live content. I do think, though, we are in this weird world where sometimes you don't know where to find it, and yet when you do, it attracts the eyeballs.
New York Yankees off to a great start this year. Yes, what's your scouting You could say, yeah in this room, also a great start this year, and now what's your scouting report of them?
Well, I think the Yankees have done a bunch of good things this year, excuse me. One of them is they've introduced baseball people back. If you think about the powerhouse of the Yankees, they've been built by great baseball people like Geene Michael's Stick Michael as they call them, you know, Luke Panela, Billy Martin. They've gone away from that the last four or five years, and they've suffered tremendously.
The fact they brought baseball people back in, they brought a much more balanced lineup, meaning Alex there's more lefties than righty's. Historically, Yankee Stadium is better for lefties. Last year they had like nine righties in the lineup, which just way too much. They've gone back to a much balanced lineup and now they have the best one two punch in the sport with Aaron Judge and Juan Soto. The challenge is do they have enough pitching is one
and two? They have. They cornered themselves by bringing in Juan Soto and not have a long term contract. Now now is he gonna want no tiny contract for seven hundred million dollars and is he just a one year wonder here in New York. I think he's gonna have a massive year.
Yep.
The question is can they keep them? Second question is do they have enough pitching to win the title?
Well, let me ask you that question. We like to think New York fans that New York is a selling point everybody would love to be. If you can be a star here, you can be a star anywhere, and there's nothing better to be a star than New York City. A lot of players, it's that I think they find it hard to play in New York. What was your experience coming to New York. I know you're a New Yorker, so you kind of know this, But some of the people you saw during your career.
No, Paul, You're exactly right. I mean some people. You know, the kitchens may be a little bit too hot for some players, and you know right away if they're uncomfortable. It's a different place. It's the biggest media market in the world. As they say, the pinstripes are very very heavy and not everyone can carry them. Juan SODA's obviously one that is going to play and play really well, Aaron Judge, the Jeters of the world. They're icons for life because they won here in New York. But some
I mean they melt into the sun. I mean, you've seen a couple over the last four or five years that were a shell of themselves and you quickly have to pivot and get them out of here.
So this is this is really cool. Like what you guys do is super fun. Jason comes in and he talks about it, and you can tell he's like totally digging this. What's it like to work with Jason Kelly? How do you manage that guy? Like?
What is Alex? We already made a deal because we are you know, he's covered private equity. He's a great writer, so I say, he writes and I used to bat, so I hit, he writes, and he made a good team. But no, Alex, in all seriousness, is really the intersection of Jason's career, mostly here at Bloomberg, in my career, mostly with the Yankees. And the fact is what we're talking about is exactly both. And we live in a world where it used to be sports and media and culture.
Now all three have come together and that's what we try to take away and then also a lot of lessons learned in this world of Shark Tank where young people want to be more entrepreneurs than athletes, right, And that's I think we're serving up and teaching and hoping inspiring through storytelling a lot of greats.
And I like, so you guys do kind of bringing sports entertainment, you know, all that together, and we're seeing it actually now in college sports with it the nil the transfer portals, a lot of these kids are able to monetize their value totally. But there's some downside to that. It seems like if you talk to you know, coach j Right at Villanova or some others, they're saying, boy, I'm.
Not sure, maybe we've gone too far.
What do you think, Alex about what's happening in the college ranks about paying some of these athletes.
It's a very dangerous road. It's a very dangerous and very slippery And the reason why I love that players are getting you know, the finances and all of that, but maybe there's a structure where there's more parity. Maybe there's a structure where kids don't get the money when they're not ready for it. And they get in trouble by not knowing how to pay taxes, And is this
more of a liability than an asset. I'm all for somebody getting market value, but is there a world that we can, you know, hold unto their thirty or thirty five until they get the majority of that where that money is compounding for them, So gifting the curse. And the other part is that I'm concerned is we want to teach Coach k is one of my great friends and one of the great great personalities in all of sports.
You want athletes to be around coach k for three or four years, not just one great point so and same thing with Kyle Parry and all of that. So we want to teach these kids that you know, the power of restriction and to be able to wait a little bit before they get you know, the marshmallow as they say, all right.
Thanks to former baseball star Alex Rodriguez and Jason Kelly, chief correspondent for Bloomberg Originals and executive producer of the Deal with Alex Rodriguez and Jason Kelly, this is.
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