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Another stock that we're watching today is a Disney. Shares are up by about six tenths of one percent after Bob Iger prevailed yesterday in the shareholder vote meeting. Either Rogannath and Bloomberg Intelligence analysts on US Media is standing by for us KEITHA, What did we learn yesterday about Disney and mister Eiger.
Yeah, definitely a huge sigh of relief for both Bob Iger and the management team. I mean it would have been, I think a very very publicly embarrassing thing for him if Pelts had had won. So this is definitely I think gives them some something to cheer about, at least in the near term. But other than that, Alex, I think it's really business as usual.
Right.
They had their work cut out for them. They know exactly what they need to do, whether it's finding a proper good ESPN digital strategy, whether it's getting the streaming business to profits and more importantly for the board, whether it's chalking out a really bulletproof succession plan this time around.
And on that succession plan, is the expectation getha that they will hire from within or will they try to make a big splash by hiring an outsider.
How do you think Disney would like to proceed?
Disney has always kind of looked within, Paul, and you know this well. I mean the last time that they went external was back in nineteen eighty four. That's when they hired you know, Michael Eisner, right, the Barry Diller protege. But after that, it's always been internal, right, whether it's Bob Bieger, I mean, it was Bob Biger after that for almost fifteen years, and then of course you had Bob Japek for a couple of years, and then you know,
we have Bob Bieger two point zero back again. So they've always kind of had, you know more, they've always looked internal. And they do have four solid candidates, so all the division chiefs kind of emerging as potential successor candidates. It's just going to be up to how they groomed them. Is Barbiger going to do something very similar to what he did with you know, Tom's tags and Jay Rizzulo kind of have that coo position for somebody whom he's kind of looking to to elevate.
What's the timeframe here, Keitha?
For this, it has to happen pretty quickly, Alex. I mean bar Biger's term, which was initially when he came back in November twenty twenty two, was supposed to be two years. They extended that out to four years. So we have until the end of twenty twenty six.
Yeah, and he's been known to extend extend extent. I mean, he could do that because most shaholders are like barb Biger's better than anybody else out there, will stick with that. All right, So Keitha's things seem to be settling down a little bit of stability. Returning to Mickey Mouse, how about Paramount Global. It's almost the opposite there. The stock is down six point six percent. Are they going to sell the entire company parts of the company super voting stock?
What's going on there?
Yeah, So it looks like now they have or they've entered this period of exclusive talks with Skydance Media and Sky Dance Media has kind of been you know this, on again, off again interested party in the Paramount company. But of course they didn't want to come out with a bid for the entire company at least up until this point. They always kind of wanted to do it in a slightly different way by kind of taking control of uh of the voting stock with through National Abusements
and the Redstone family. Now it looks like they're kind of going to engineer like a two step process where they first take control of National Amusements and then go about and merge sky Dance with the entire company with Paramount. So still, I mean, there are two there's just more unknowns than knownes. At this point. There seems to be some report out there suggesting that they would need to do an equity deal raise of at least three billion dollar do that's going to be really dilutive for the
current shareholders. Again, we don't know exactly how much Sherry Redstone is demanding for her voting stock. There are rumors out there suggesting it's upwards of about two to two and a half billion dollars. She also owns about close to almost a billion dollars in economics take in Paramount. So again, too many unknowns right now, Paul. But you know, we do definitely have concrete talks, that much is for sure.
So is the Apollo thing like off the table, right, because that would be more of a piecemeal approach to Paramount, right, even though the cash deal was better.
So the Apollo thing was actually initially it was it was piecemeal. So but they only were really interested in the film studio. They did not want the TV networks, They did not want the streaming acid. But it looks like yesterday, you know, when reports emerge about the sky Dance deal, they said that Apollo actually had made a twenty six billion offer and all cash deal for the entire company, which Cherry Redstone for some reason basically said no.
To wow, because I'm looking at the enterprise value today about twenty three billions. It would have been a little bit of a premium there. And boy, you know who looks smart is the guys at News Corp. I mean selling their company, you know several years ago, you know.
I just the Murdocks. They look kind of smart here.
So what's the future. I mean, this is the Paramount Studio, Gith, this is one of the prize jewels in Hollywood. I mean, what happens to this company? I mean, is it can remain a publicly traded company.
Is it going to be taken private? What's this? What's mostly outcome?
I think the most likely outcome at this point, Paul, is that it still very much remains a public company. You know, we know that David Ellison is really only interested in the studio portion of the business. And you're absolutely right. It's an iconic studio, There's no doubt about it. They have a very very valuable studio lot right in the heart of la that's worth maybe upwards of one
point five two billion dollars. So obviously there's a lot of assets that he likes, but only with the studio business. So again the question is, yes, he can keep it a public company, but he might really kind of trim it down, try and find some buyers for the TV network, for probably the streaming platform, and just make this like a pure play kind of a film studio with you know, production and licensing operations very similar to like what lions Gate is doing.
Would that command of valuation like a good valuation for that if they did that?
So we do know that Apollo came came out with eleven billion offer. That's a pretty decent It's about a thirteen thirteen and a half times EBITDA valuation, which is pretty much in line with where other you know, pure play studios are trading. So probably, yes, somewhere in that in that range.
All right, we got you here. Let's ask you about Warner Brothers. Discovery off another one percent today, off twenty four percent this year, down forty three percent over the last year. Any scenario there that's that is worth kind of looking at.
I mean, it's just it's been all doom and gloom at Warner Brothers. And really the one, the one metric I think that people are like fixated on for Brothers is EBITDA. You know that when the deal actually went through or when they when they were looking to merge those two companies, they spoke about fourteen billion dollars in EBITDA. This year, probably we're not even going to hit ten billion,
and that's really why investors are so upset. Combine that with over forty billion dollars in debt, and that's a recipe for you know, the doom and gloom, and that's exactly what's happening there. So until we kind of get some better metrics, it's not.
Going to look bailed on the media industry at the right time.
You me, yeah, exactly.
I mean, I am going to see you doing well. You're kind of in it right now.
My lively.
Well, it does kind of. I don't know, but you know, it's just this is.
An excellent point. This is an excellent point, John Tucker, that you just went from the other side of the media business. I'm seeing Dune two on Saturday, so I feel like I'm doing my part.
That's right.
Excellent brothers, excellent movies and excellent excellent movie.
It is absolutely brilliant.
I like Paramount Plus because of the whole survivor thing because I'm addicted to survivors. So you know, I'm helping.
I'm what I need to do, all right, Githa, thanks so much. As always, Keitha rock Nathin. She covers all the media stuff for Bloomberg Intelligence space down in Princeton.
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Let's say with energy for a moment. So Green Plains is basically an ethanol company producer that wants to become an ag tech company, and the CEO is taking this very seriously and doing a lot in the middle of this transition. The stock is down, though twenty three percent in the last year, it is up about two percent today. And we welcome the CEO and president, Todd Becker. He joins us now from Omaha, Nebraska. Todd, it's always good to talk to you. What I love about talking to
you is you just give it like it is. And you saw the shift from ethanol into something else before really anyone else did. And the idea is, look, you mix ethanol with gasoline, but if we're all driving evs, do you really need the ethanol. How's it going? How's this transition for you going?
It's actually going really well. I mean, thanks for having me again. I'd love talking to you guys. And you know, everything that we've laid out so far is on track to get to twenty twenty five, which is when we said we're really going to be able to start operating on all cylinders, no pun intended.
But look, I.
Think our base feel still has has strong demand, but there's other value that we can unlock and everything that we do, and there's so much technology out there, and we just announced a great collaboration with Shell, a joint venture that we just basically had a grand opening ceremony that really just takes us next level on what we're doing in ag tech because they, as much as they are one of the largest energy companies in the world, they also have a really interesting view on agriculture and
technology and combining what we can do and energy with what we can do in agriculture. And we've just kicked off an amazing partnership that we've been building for several years. So a lot's going on and we're really excited about what's happening.
All right, Can you talk to us about this joint venture because when you mentioned Shell, that gets my attention when I'm thinking about kind of biofuels companies like yourselves kind of getting together with traditional traditional energy companies.
Yeah, So, look, what Shell's looking for is more low carbon feedstocks. That's the most important thing to them. And what we're looking for is more low carbon ingredients for food and for feed and so we have this technology.
We bought a company a few years ago which we think is one of the leading ag tech companies in the world called flu Equipped Technologies, and they have a separation technology that basically just puts something into their machine and it separates it out into all really interesting ingredients. Shell on the other hand, had a chemical process that basically unlocks what's left on different parts of agricultural waste or fiber or anything that's getting processed that we couldn't
go after to start. And when we put these two together, basically you can combine their chemical process to liberate oils and proteins and other things that are stuck on sugars that are stuck within processes, and then we take it from there and we can separate them all out. So it's really an amazing technology collaboration. We want it so
we can get more sugars and proteins. They want it so they can unlock more from the standpoint of vegetable oil so they can make renewable diesel and other things like that, as well as the last part of it is that we could finally unlock the sugar that's stuck
within the fiber, and that's cellulostic sugars. And for years and years and years, people have been trying to crack this code on cellulosic alcohol and fuels and that dream that people have had, and this is one thing that potentially unlocks that whole dream of getting every piece of value out of every piece of that corn kernel. And the great thing about this technology is it's just not limited to a single commodity. It's actually agricultural feedstock agnostic.
You could drop a lot of different things in this technology. So we think it revolutionizes agricultural processing if it works, of course, revolutionizes agricultural processing globally. Bio refining globally unlocks all of the value of what we do in everything
from food and fuel and feed. And it's the first time, really we think that a major agricultural company, and one of the first times a major agricultural company and a major energy company get together to use everything we do to make all of the different different products that we need.
So Todd, it does sound amazing, and I like the idea of like liberating all the parts of the corn. It's it's a great phrase It's a two full question for me. When you get the stuff from that, what do you use it for? And how expensive is it to sort of ramp and scale all this up.
You know.
The great thing is is that over the last several years, as we've been transforming our company, we've deployed about three hundred and fifty million to four hundred million dollars in the separation technology already, so we're ready using it. So our technology has proven already, so we've we've put it at several of our facilities and joint venture facility, so we are already beginning to separate most of what happens
in a kernel of corn and other products. So what this does You lay this over it and it's all the remaining things that we can't get they can get it chemically in their process. Is we just could never get it that way because that's not what we did as a company. So, you know, the cost we hope, we're hoping because we've already deployed technology of five of our sites, which is six coming on today, We're going when we overlay this technology on top of it, we
should be very cost efficient. The first one we built it under really nobody really knew what we were building. But in ne York, Nebraska, we already have the first build that we've been spending years doing quietly under the radar screen, putting our technologies together, and we're going to start that up in about a month or two. And that's really what what we had our grand opening and our announcement on it was just a very quiet collaboration.
But really what it does it extracts everything available. So all we leave corn oil when we send out, when we send out our fiber, we can go after that that can be using renewable diesel and sustainable aviation fuel. We use sugars, We leave sugars on our fiber that goes out as animal feed. We can go get that which can be made into say elastic second generation low carbon ethanol. There's more protein to go after we send
out very low value protein. Still, this technology together unlocks ultra high protein that we're already shipping to pet food and salmon producers around the world. It just gives us more, you know. And then and then lastly, you know, what we're able to do is take all of that and think about low carbon alcohol for things like sustainable aviation fuel. That's going to be coming down in the future because the only true path to volumes of sustainable aviation fuel is going to come through alcohol.
So and I'm assuming so if if it's cost competitive, if you overlay the technology, is that cost for you guys? It doesn't raise the price of the products that you're then having to sell.
No, Actually, you know, we're just able to unlock more. We're sending it already out as a as a ever thing left we send out as a more of a lower value product. So it unlocks all of that. And now now what we can do is actually make great products and get much higher values for what we're what
we're going to produce than what we're doing today. And the most interesting thing about this technology, Alex is is I can either drop a corn, you know, to the basic of it, I could drop a kernel of corn in there, But I could also drop a soybean in there and blow up and chemically separate that and really disrupt what's happening potentially in soybean processing. Or I can drop a kernel of wheat in there, yeah, and go unlock all of the protein and the oils and the
sugars and all of those things. That nobody's been able to go after in any in any kind of early efficient way.
So Todd, if I'm looking at your stock, it's up ten percent almost since that announcement, but it's not had a good full year, and I'm wondering, like, when do you feel like you should be getting credit for this? And I know you're going to say, like yesterday, but you know what I'm saying, Like.
When we started our transformation to stock was eight, it ran up into the you know, the high thirty, and that we're back down. You know, we brought the couple of reasons. I think we're down a little bit this year is well not a little bit, but you know, we brought our MLP in, so we wanted to clean up our capital structure. So we were able to bring that in and we and we handed our shares to MLP shareholders that you know, they were earning a pretty
high yield. And I think that puts some pressure on our stock as well, as we've seen some drops in prices and in ethanol is trading a dollar under gas, and so now we're getting more competitive again. And but we really saw a dropping veg oil price. Vegetable oil pricing here recently, but now that's starting to come back, which I think is putting it bid back into our stock as well. So you know, we're about a year. You know, what you've said is our path to twenty
twenty five, twenty four is our transition year. We need to deliver on some some financial results this year, and I think we're going to be able to do that as a year progresses. But you know, we've made investments, and you know, the whole sector really kind of fell out of favor anyways, and I think we got dragged down with that. But we have a great technology, we
have a great platform, We've got great products. We're going to start our first and I know we talked about this a few years ago, our first clean sugar facility. We're going to make food grade dextros for everything from Gumbi bears to to Seltzer drinks. That's never happened in the history of our industry. We're starting that up next month and later this month as well. So there's a
lot going on. We're right towards the back end of what we said we were going to do, and now it's starting to all come to fruition, you know, and the pressure came across the whole sector. If you look across the whole sector and agricultural processing.
You finally said the word that got John Tucker here in the studio excited. You said gummy bears.
And I was writing, I got distracted. I'm sorry, but.
You know ethanol whate was okayne, but you know, gummy bears, no sugar. He was paying attention. I hate Todd, really appreciate it. Always going to catch up with you. Todd Becker, President and CEO of Green Plans, joining us from Nebraska.
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So every day Bloomberg has a big take where they really dive deep into a topic and a story and they're quite good. And there's a podcast and it's a written piece and I highly recommend that you check it out. And the one today is particularly interesting. The title Hubris at Hurts Doomed its massive bet on one hundred thousand teslas. It's basically the rise and fall over the last few years of Hurts and its relationship with Tesla and EV's
Eric Shatsker and David Welch responsible for this article. We have Eric Shatsker, who is now at Bloomberg New Economy editorial director joining us. It was a great piece, and there were things about Tesla's that, like I didn't know were problems, like if you don't know how to drive it and you r of a sudden, put the pedal to the metal, you go really fast and then you crash. Like these little details I found so interesting. Walk us through what you learned and what the piece is about.
Well, you just touched on one of those those things, Alex, which is that the experience of a Tesla owner is very different from the experience of a Tesla renter. And going into this big bet on one hundred thousand Teslas they placed in order for one hundred thousand Teslas. In fact, back in twenty twenty one, the new owners at Hurtz didn't appreciate that there were no data to be fair on what it was like for our rental car company
to have evs in the fleet, because none did. Heurtz was going to be the first, and so they did look at the data how to Tesla's perform when they're owned by individuals, And generally speaking, teslas perform well. They don't require a lot of maintenance. Obviously, refueling the car, so to speak, is a matter of plugging it in. But if it's your Tesla, it probably sits in your garage, or it sits in your driveway, or maybe if you live in a city like New York, it's at a
parking garage and you've had a charger put in. That's all fine, and these people tend not to get into a lot of accidents, and they don't have range anxiety because they own the car, they made the decision to buy it. It's a totally different story when you get off of a Red Eye flight and stroll up to the Hurtz counter and are told that no, I'm sorry, the car you reserved is not available, but we're giving
you a Tesla. If you've never been behind the wheel of an ev it can be a terrifying experience.
You don't know.
You don't want to have to find a charger in the wild. You don't know what this instantaneous breaking.
Is Liken the car, you don't.
Realize that it has rocket like acceleration, and as a result, Hurts with its Tesla fleet, started running into all kinds of problems. They were crashing and it's very expensive to repair a Tesla. In many cases they have to be junked because insurance companies are worried about the damage that might have occurred to the battery. People didn't want to
rent them, so the demand was isn't there? And then of course Elon Musk cut Tesla prices by thirty percent and kind of blew a hole into Hurtz's balance.
Sheet economic mode.
How did Hurts get into this position, It's a good question.
This was a rental car company, the only major rental car company that went bankrupt in the early days of the pandemic.
I'm a gold circle member of Hurts.
By the way, I just strolled right up to my car, John.
Some people have very good experiences with Hertz, including Paul Sweeney. Evidently, so Herts went bankrupt. It was bought at a bankruptcy in June twenty twenty one by two professional investors. Tom Wagner runs Nighthead Capital and Greg O'Hara is the founding partner at Stari's Management. They raised a billion and a half dollar fund. They wanted to find travel and leisure companies that had been crushed by the pandemic, but of course which in theory would soar once the economy reopened,
and Hurts seemed like a great candidate. And actually that part of the thesis played out perfectly once the economy reopened. In fact, before the economy reopened, when people realized getting into a car and driving somewhere doesn't put me at risk of COVID at all, demand for rentals went sky high, and so coming out of this acquisition from bankruptcy, Hurts was crushing it. But they had a transformational plan to turn it into a largely electrified rental car company, and
that's where everything went pear shaped. I talked about it, the demand, the damage, the price cuts, and we say it's a tale of hubris, because in many respects it is. Of course, everything looks clear in hindsight, it did sound like an incredibly good idea of the time, and I think for the sake of the planet, it would be nice if you could electrify a rental car company and save you know, the environment from all the gasoline that gets poured into rental cars. But it just doesn't work
in practice. And whether it's arrogance, whether it's hubris, whether it's blind optimism, it could be.
A combination of all those three.
These new owners, these professional investors, one who runs a hedge fund, the other who runs a private equity firm, thought that they had an answer for this industry that the industry itself had ignored for years. And the truth of the matter is running, running any company in the industry is tough, right, requires some experience, maybe.
And they and the funny thing is, well, not for them, but is that they could be right just either a little earlier, a little late, depending on how you look at it.
You know, whenever we talk about early, right, it's the broken clock thing, right, broken clock is right two times a day. And the case of being early, I.
Thought it was a great strategy when I first heard it just sounded hit so many buttons there. But I guess that kind of goes to the bigger question, which we asked the auto industry were at large, is have we seen peak interest in evs?
This is why I found the article so interesting because there were things that I didn't think about, in that they don't have dealerships, right, they don't have a relationship with dealerships. So like when my super retire gets, you know, messed up, I did just drive it in and then they fix it and then we drive out. Kind of thing. You can't do that with a Tesla. I never thought of that. For example, I never thought of how difficult it would be to all of a sudden get off
a plane and go sit in a Tesla. It's weird enough getting in the morning to a Tesla and getting in the backseat. I can't imagine just being shoved into the front seat and having to drive it at the same time. And these little details I found to be very prevocative.
Well, they are, as you say, something of an indication as to why demand for EV's right now is slowing.
Hurts.
You know, we can play on the fact that it even has yellow as part of its logo. Was the canary in the coal mine for the EV industry. True what began to happen it hurts is what the rest of the industry is beginning to wake up to that all of the evs that are being cranked out right now may not have a natural buyer because people aren't enough chargers out there. People haven't gotten over this idea
that it's a different driving experience. People, as we all know, are very personal about their cars, right, it's an extension of themselves. And you don't want your arm to feel like it doesn't belong on your body, and that's in some respects how people feel about getting behind the wheel of an EV.
Thirty seconds left, Eric, if I wanted a Tesla from Hurts tomorrow, could I get one?
Or are they just you can? They are beginning to sell down the fleet. Though they had sixty thousand evs, they've put about twenty thousand Teslas on the market. In fact, if you want to buy a Tesla, that was a great time to buy one used in fact, even off the Hurts website, because they are way cheaper than they've ever been before.
All Right, I tell you, folks, this is great stuff. Big Take stories.
We love them.
We love to support the Big Take reporting because it is deep, really cool stories and really cool, well researched, role sourced articles. You can read the big Take stuff. Eric story today on all the Big Take stories on the terminal place. I'm going to Bloomberg dot com slash Big Take get access there. Eric Shatsker Bloomberg New Economy Editorial Director. We appreciate getting it in the Bloomberg Interactive Broker Studio.
You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on applecard Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa Play Bloomberg eleven thirty.
I'm going to talk technology. I got a lot of things on the play here technology wise on a rock. Rana joins his senior technology channels for Bloomberg Intelligence. He's sharing our Bloomberg Interactive Brokers studio in New York City because Bloomberg Intelligence is hosting an AI seminar conference Bloomberg Headquarters this afternoon.
Is that right?
Yeah?
Twelve thirty onwards.
A lot of companies Google, Microsoft, Salesforce.
Adobe, I mean it's we have.
A and lots of smart investors are gonna be there, right, lots of spart.
From But I'm martyring a panel and you said that I could ask dumb questions though? Is that? Does that still hold?
No?
No, You're gonna you're gonna do really right because.
I'm like, I'm serious, I'm no way I expert here. Yeah, so I.
Wanted to start with this story of this hubbub thing. What what is hub Spot? And it's a thirty billion dollar market cap company. Yeah, they can't be acquired.
They're too big for exactly my point because they see from a market share point of.
Vie summarize the story.
Because it's a CM software company, HubSpot. They primarily sell to small and medium businesses. It's a high growth company. It's done very well. It is you know, it is one of the favorite stocks stocks for people, I mean, a growth stock.
But the story today is that alphabet This is a Royter's reporting that alphabet is I think Bloomberg's Matt match it Alphabets perhaps is and talks to acquire this company. And again this company has a market cap at thirty four billion dollars, which automatically means.
Regulars are not going to.
Allow That's that's my biggest thing.
See.
One of the things is Google does not play a lot into the enterprise applications world, which is Salesforce, Workday, Microsoft. You know, Google has some Google Sheets and a few other products, but it's really not a big player in the cloud applications area as much as you know somebody like a.
Salesforce would do. But this could be a big deal.
I mean, if that it happens, it you know, it completely shakes up the competitive landscape. But as Paul mentioned, I mean, it's going to be tough for regulators to approve anything that big.
Yeah, exactly. But then there are so many software companies at some point they're going to have to do some M and A. Right, there's like a bazillion of them. I honestly can't keep them straight.
No, I agree with everything that you're saying, But the question is who the buyer is going to be the problem in this case or in a lot of these cases is regulators are very tough on large you know, of the big tech giants buying software come or any company that, how are they going to.
Feel about Apple and robots. So here's the So this Pokemon was on TV yesterday. So this is Mark and broke the story that Apple apparently as teams investigating a push into personal robotics, and that's a feel but the potential to become one of the companies ever shifting quote
next big things. This is according to people familiar with the situation they were looking at, say, robots that can follow users around their home, for example, and exactly, and they have also deployed an advanced tabletop home device that uses robotics to move a display around.
What because this.
Means so, I you know, I see Samson showed a demo of a robot that's following around and you know, you're working out and all.
Sorts of stuff.
So these things don't really move the needle. It's a fancy stuff to be part of the you know, Apple ecosystem. But you know, Frankly, I mean, how many can you sell and how much money can you make? So I'm I'm you know, doesn't get me excited.
Frankly, Yeah, I.
Mean I think the so as we think about Apple, it seems to me the next big thing to use that term has got to be you have to give shareholders and AI play. Oh yeah, absolutely, and if and perhaps it will occur as soon as their developer conference in Juque. What do you think, whether it's this year or next, what do you think a viable AI play is for Apple?
Think about it that our phone is a medium for anything. If I give you a right now, if I have to. Let's say, ask a question to Open Ai. I open the phone, go into the open Ai app and write my querdi. Imagine you don't have to do any of that stuff. You straight away ask CID that question and you get a very good answer. Right now, the answers aren't very good. So that's the step that if they can figure out that algorithm in between, I think it's going to.
Do them very well.
Did they figure it out or do they work with Google and stuff for Microsoft to figure it out?
That's a very good question.
And you know Mark had reported that if they've worked with In my view, if they work with Google, I think it's going to be much faster. I think if they work with open Ai saying it's going to be faster, just because we've only heard that they got trad of the car division a few months ago, reallocated some engineers there. You know, if they had something, they would have deployed it,
you know, or would have showcased it. So if they're working very hard to come up with a new product, you're not can it just come up within two three months and be ready for it?
So I hope for their sake, for their.
Stock that they do announce a partnership with one of those two companies and showcase people what capabilities can we do.
Now.
Remember in the case of Microsoft, when they have a deal with open Ai, their products have got enhanced very quickly using open eyes, you know, backbone or technology, whether it's you know office or whether it's a GitHub, the coding platform. It's been very quick. So it can be done. But you know, we'll find out in June.
The stocks down eleven percent this year lends me to believe that, you know, the marginal hedge fund buyer is not going in and they're buying a.
Position ahead of this June event.
Is that I mean, what are you hearing at today?
People think we'll get something this June or not.
Apple has always been more of a value play for a long while. In between it became a growth story because during the pandemic there was a lot of games downloaded. And you know, so now that growth phase is over. Now we're getting back to that single digit growth rate.
I always thought they had maybe a high single digit number, but this year is going to be low single digit to even flat, you know, So it's going to be bad this year only because of China, but having said that this is a company that can grow you know, revenue five six percent an in a normal year.
So this is why the robot thing, if we circle back to that, confused me because why would they put anybody into something like that. Why wouldn't they just take those workers and put them into an AI segment to work on that instead, Like why it.
Could be somebody spent project.
I mean, it's just these are such a I mean, they can't afford to do at all.
Yeah wogue, Okay, well fair enough, fair enough? Are they going to do a big buyback?
I they have been spending almost ninety billion dollars a year for buybacks. I've been wanting, I mean hoping they will do a little more. But but no, that's not the case because they do have to showcase whether they're really can fix the China situation or not, because I don't think buybacks would help that unless we have some clarity on China or AI on China.
Since you bring up China, how do we get clarity on China? Because right now I would just if I were a shareholder, I would feel like that is by far the biggest headwind to the.
Jample it has been, and you know, we've talked about it for the last two years.
He just went to China.
He's been, you know, basically telling everybody how China is very good for them and they'll invest more money. Maybe that changes the behavior over the next few months, because so far what we have seen in the last two quarters is they've been losing market share and people are opting for a local brand rather than the Apple brand. And I think Apple's cache, you know, should come back if they are able to convince that China is an integrative part of their story.
I think it can. It can turn around.
We'll try to Secretary Jennet Yell in there now, so see how that sort of pairs out before I let you go. Also, FT had an interesting article that talked about Google considering charging for AI powered search. What would that in essence mean And that's a big deal for Google to do something along those.
Lines, right see once again Open an Eye.
When you get the app, you get the free app which everybody if you want GPT four, which is the latest version of their their you know AI model, you have to pay a subscription.
I think it's nineteen ninety nine a month or twenty dollars a month.
It's probably going to be the same thing for you know, Google or anybody else out there, that you have a base level model that's free, and then you can, you know, charge a little bit more for a premium model. It's just part of, you know, how they want to monetize some of that.
That's an interesting Paul. I don't know if you if you notice this, but when I start for something on Google now on my phone, I don't click any of the links anymore, because all of a sudden you can click on a drop down menu and it gives you a quote from the page you would have clicked on. And I have to think, like, does Google lose money?
There?
Is that or the or the or the other companies, Like how does that affect them?
Google controls the search market and they have a little bit of a threat in front of them. I personally think they will figure it out. But the two demos that they have done in the last one yere have not really worked out well for them. But I feel they will figure it out all right.
On rag Rana, thank you so much. He's in talent again. The Bloomberg Intelligence folks, they're hosting a big conference here in our New York Headquarters at seven thirty one Lex
about all things AI. I think they got the definitive research report out there, deep dive on AI, and are going to get some of the industry leaders coming to the Bloomberg headquarters today giving us the latest on what has really been the driving force, not just in technology, but really across the markets over the last eighteen months or so.
So that's going to be cool.
This Say afternoon on Rograna. Thank you so much.
We appreciate that.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecard Play and Android Otto with the Bloomberg Business App. You can also listen live on a on Alexa from our flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
All right, folks.
On this week's episode of The Deal, Jason Kelly and former baseball star Alex Rodriguez, they talked with Redford Capital founder and managing partner Jerry Cardinali. He breaks down his career, the purchase of AC Milan, and so much more. He also discusses how sports investing has evolved over time.
Tick list and so I guess I had a very philosophical moment where I said, you know what gets me up in the morning.
What do I love?
And I love playing shadow entrepreneur, and I like solving problems with capital, and I just it just so happens, you know, luck in people's career. I happen to hit an inflection point with sports that I couldn't possibly have seen coming back in two thousand, two thousand and one. Right, you look back on that the last twenty years and you're like, wow, you really you know, Luck's great. You really hit an air pocket that you know you could where you took off. Now the challenge is navigating that
because now everybody he's discovered sports. Yeah, sports is now an asset class. That scares me. When I start to hear about things like sports being an asset class, my initial reaction is to run in the other way. Yeah, and so you know, but I say, look, you can't make money if you don't put money to work, all right.
That is Jerry Cardinali. He is the Redbird Capital founder and managing partner and a big fan of his. He's a really leading financier in the world of sports entertainment media. The convergence of all that kind of good stuff, and he sat down with Jason Kelly and Alex Rodriguez for their Big Take podcast. Jason Kelly joins us here. He's chief correspondent for Bloomberg Originals. Jason's also host an executive
producer of The Deal podcast Jason. Really cool discussion with Jerry Cardinally, he's involved in so much.
What would you guys talk about?
Yeah, I mean it was the biggest challenge with Jerry was sort of narrowing it down and in a lot of ways. I mean, to me, the two most interesting things about him at the moment, and there is more
than this, you know. One was the very instrumental role he played with the Yankees at a pivotal time in that franchise, you know, late nineties, early two thousands, especially, you know, right in your wheelhouse, the creation of the Yes Network, which obviously just set sort of a different path for media rights and how teams and leagues you know,
sort of deal with with all of that. So that's one, and then the second is moving into ownership in a meaningful way with AC Milan, you know, one of the most storied soccer clubs in the world, and sort of what led him there, and then along the way he's doing business with Tom Cruise and Top Gun Maverick, and he's in business with Ben Affleck and Matt Damon, and he's in business with the Rock and Danny Garcia and the XFL. So he's got his he's got his hands on a lot.
Yeah he does. So, wasn't it like what else is he working on?
I mean, I don't know how he does it, because I mean he really is just he's a globe trotting deal maker, you know. I mean, you know, one of the things he identified, I think along with a lot of folks, was you know, the importance of sovereign wealth. So he's in business with Abu Dhabi looking at a number of different things. Jeff Zucker, you know, the former CNN executive is a partner of his, looking at media deals.
They took a look at the Telegraph over in the UK.
They're involved in sky Dance, you know, which obviously is in the headline headlines today with the paramount deal. So a lot going on for him, clearly, and as he said, as you heard him say in that clip, you know, part of it was luck. I mean he was at Goldman and you know saw some things happening with the sports world. Clearly, the Yankees were a local client. I
mean that sounds ridiculous, but they were. But you know, he clearly anticipated a lot of this collision, this coalescing as it were, of business, sports, technology, media, et cetera.
One of the things we've all seen over the last, you know, many years is just the continued increase in the value of sports, whether it's the franchises themselves in a various sports globally, or the rights fees for the broadcas casting. What's this view on that, because it seems like you just can't lose money in this kind of stuff.
I mean, that's and that's always the dangerous place to be, right, you know, when when it feels like that, which it certainly does, You're exactly right, Paul, that's exactly how it feels right now, you know. I mean, and this again gets into a lot of your expertise around the media world. I mean, part of what is fueling that is this massive disruption in media between you know, broadcast cable streamers.
Who's going to really pay up for the media rights for the big sports and even some of the smaller sports. We don't know I mean, when this new NBA deal comes up, one of the big speculations is is Netflix.
Going to be in that?
Is Amazon going to be in that, or is it going to be some of the more traditional players. That flows straight through to valuations, as you alluded to, and you know, you're seeing, you know, these teams just trade up and up and up. The Washington Commander is going for six billion dollars. The Phoenix Sun's going for four billion dollars. I mean, these are eye popping, mind blowing numbers for franchises that twenty years ago we're selling for like a couple hundred million dollars.
So why did we freak out? And he said sports is an asset class? I think freak out's number statement. But you know, like, why does that worry him then, when like he's part of making it an asset class?
I think because it has the danger of becoming sort of commodified and you know, traded in a way that you know, maybe takes out some of the some of the some of the opportunities to really some of the opportunity to find opportunities, if.
That makes sense.
He had this one line that I love that we've been talking about in our production team, which is they trying arbitrage incompetence, which I think is one of the funniest things. And like, where else can we do exactly, It's like, can we make do you want to make a list? We don't make a list right now, Let's let's create a shared note, you know and me because
I just love that idea. I mean as an investor, I mean that is actually what you're trying to do, right You're trying to find these opportunities where it's like they're not running it right, Let's go in and run it better.
So how does Alex in these conversations? I would think Alex is most of these kind of an insider. He knows all these people. He's probably seen a lot of the deals that they've seen.
Well, this one people, Oh, totally, you're totally right, Paul. I mean, this one was fascinating because you know, this is a guy who actually was instrumental Jerry in helping bring Alex to New York, which is, you know, one of the biggest deals that happens for the Yankees in the last twenty five years, as you well know, you know.
The other thing they talked about was, you know, getting together over dinner with Randy Levine, the president of the Yankees, and saying, hold on, how do we put together a roster that can actually win us a championship? And guess what they did in two thousand and nine. I mean they were the three of them instrumental in identifying who
could make that happen. So you're right. I mean it's it's very fun, I fully confess for me to sit here and be like, no, you guys, just tell this story what was happening sort of behind the scenes and around that table.
Yeah, Oh my gosh, I can imagine that, Like you feel success full if you don't have to talk.
Yeah, because I say more about that, that's my contribution.
Tell me how you felt about that. So what else can we look forward to? What's next on your plate?
So a couple really good episodes, you know, still to come. More about halfway through the season. Brandy Chastain is one I'm especially excited for people to listen to. Of course, Iconic Player, And last week we were down in Miami filming an episode with none other than the Goat herself, Serena Williams. So that's coming up in a few weeks.
This is why you have son on your face? Yes, for a radio audience, I was like, why is he?
Sort of.
How does this guy?
How does this guy pull it off?
Yeah?
So I can't wait for y'all to listen to Serena. She is unbelievable. It's it's stories and perspectives from her that you've never heard before. So very very.
Excited for that one downline. Okay, awesome stuff.
Jason Kelly chief correspondent for Bloomberg Originals. She's also a host an executive producer of the Deal, and on this week's episode of the Deal, Jason Kelly and Alex Rodriguez a talk with Redbird Capital founder and manager partner Jerry Cardinali. Jerry he going to break down his career, the purchase of ac Milan, they owned that one storied franchise in Saria in Italy, and so much more. He's also discusses how sports investing has evolved over time.
So some good stuff there. We'll have that. Jason, thanks so much for joining us.
This is the Bloomberg Intelligence Podcast, available on Apples, Spotify, and anywhere else you will get your podcasts. Listen live each weekday ten am to noon Eastern on bloomberg dot com, the iHeart radio app tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal