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Want to bounce off with Live Nation and our next guest, Jennifer Reed, Bloomberg Intelligence Senior Litigation analyst. Jennifer, thanks so much for coming in studio here. We don't know a lot about this Live Nation settlement, right, Maybe we should just start with what.
Do we know?
Right?
And it's changing by the minute, by the way. I keep seeing new reports with new details. But it looks like at least one part of it is a divestiture that would be divesting large amphitheaters that are owned by Live Nation. The Department of Justice alleged that Live Nation owned sixty out of the one hundred top amphitheaters in the US, and the control over those amphitheaters, which the
artists really needed for summer tours. Desire for summer tours was part of the problem some of the claims that were left in this litigation, so selling some of them opens them up to other promoters.
Okay, I guess one big question people had was Ticketmaster. The fate of Ticketmaster and whether that stays with Live Nation or whether it's spun out or the company's forced to sell that. Do we have a firm answer as to what happens to Ticketmaster.
Well not really.
According to the DOJ settlement, it does not have to be sold. But there are forty states involved as well. They are also plaintiffs, and they also have the authority to litigate under federal antitrust laws just as the Department of Justice does, and not all of them have settled. According to the news reports, New York has actually come out and said this isn't good enough. We're going to
continue on. So if they continue on with the litigation, they will continue to seek a divestit your order from the judge for Live Nation to sell Ticketmaster. They see that as the only solution to kind of fix a broken concert ticketing system and live concert industry. I'll tell you, I think it's a long shot. You know, once you get this settlement with the Department of Justice and you kind of get the lose the weight of the Department
of Justice behind you on these anti trust matters. It is difficult for the States to go forward and win, even if they won a jury determination that Live Nation was guilty of a legal monopolization. I'm not so sure that the judge would be willing to stick his neck out and impose what's considered a really drastic remedy generally to force a company to break itself up.
So let's play pretend and say the States are not successful with their trials. Does this DOJ settlement mean anything at all to you and me when we go out to try to buy tickets. I mean, and I've said this people who listen to the show regularly. No, I talk about being a family of five, and man, if you had taken a small mortgage, this just like take the whole Saley to go see a show. So is that going to get any better under this settlement as it stands.
I'll tell you that I'm skeptical. And you know what you just said is why this case is so politically popular. And this was a little bit surprising because it really has bipartisan interest. It has bipartisan support, you know, consumer support.
Kid Rock was going to come along and he was going to be a witness for the plaintiffs in this case because Live Nation has been under a Department of Justice consent order since twenty ten, So, in other words, since twenty ten, the way they behave in the marketplace was supposed to be regulated. They were supposed to behave in a certain way, and they've managed to really get
around that for years. In fact, during the first Trump administration, the Department of Justice investigated, determined that Live Nation was violating the terms of that order, and extended it and sort of bolstered its terms. And now this case came along with the allegation that no Live Nation continues to violate the terms of that order. And so my skepticism comes from, there are new terms here that they're talking about.
That again, our behavioral I talked about selling the amps, but there are also behavioral conditions, and if Live Nation has been able to get around behavioral conditions since twenty ten, I'm not sure what's going to stop now.
What about Ticketmaster's competitors. Have they done things better? Have they changed a way that they sell tickets or that they allow people to buy and sell tickets.
What's interesting you ask, because the CEO and founder of seat Geek was one of the witnesses I heard last week, and seat geek started as a secondary ticket seller. They were just a marketplace to bring together people who wanted to sell tickets they couldn't use and buyers. But they're trying to get into what's called primary ticketing, being the first one to ticket an event, and really have struggled.
And they say they have struggled because of Live Nation, that they have superior technology, that their platform is better, that what they can offer venues is better, but they haven't been able to get those venues signed up because either they have a long term exclusive agreement to be ticketed by Ticketmaster, or because Live Nation, which is a huge promoter handles artists tours, said we'll route our artists
around your venue. We won't bring them to your venue if you use some company other than Ticketmaster.
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Just a few days ago, Novo Nordisk was suing Hymns and Hers because they were selling a cheaper knockoff brand of their best selling WGOVI blockbuster obesity drub. Well, you know what, now they're in business once again with Hymns and Hers here to break it down. As Madison Muller Bloomberg News health reporter boy shares of Hymns and Hers up now, I think better than thirty percent. So Wall Street obviously likes this situation. How are these two companies working together?
Yeah, it's a little bit of a crazy, surprising situation that ends a month's long saga between the two companies. They are now pairing up for the second time to allow Novo to sell discounted versions of its weight loss drugs on Hymns and Hers telehealth platform. And people might recall that this actually was the case back in June.
The two companies were working together to do something similar and that sort of fell apart spectacularly when Novo accused Hims of deceptive marketing of these copycat weight loss medications that it was continuing to sell on its platform, and that really sent him shares down at the time. But the two companies since then have traded various barbs I mean with Novo suing HIMS over selling a copycat version of its blockbuster weight loss pill that recently launched, And
so this is definitely a surprise too. I think a lot of investors out there who had expected this to continue dragging on between the two companies.
So is this what's really driving this strategic partnership though? Is it eHealth these eHealth providers and if so, sort of connect those dots for us.
Yeah, exactly. I mean, I think on both sides, both companies are under enormous pressure right now. HYMNS mounting regulatory and legal pressure, both with the Nova Noordist lawsuit that now has been pulled, but also with the FDA saying that it was going to crack down on compounded weight loss drugs. There's a possible DOJ investigation, and they also disclosed during earnings a couple of weeks ago that they're
under investigation by the SEC. So they have a lot going on themselves and really need a path forward, even though they have other offerings on their platform. Investors really have said that they don't see another similar avenue of
growth like weight loss drugs. Then on the Novo Nordisk side, Novo has really been losing market share to companies like Hymns that sell these knockoff weight loss drugs, as well as Eli Lilly, which is a massive pharmaceutical company based here in the US, and they have rival weight loss drugs that have become more popular than Novo's. So there's a lot of pressure for both companies on both sides. These ehalth platforms, like you said, have been an enormous
driver of growth for Lily and for Novo. A lot of patients are seeking out these medications on these online platforms where it's often easier and can be cheaper to get these medications, and so partnering both companies have been looking to partner with a lot of these eHealth companies, from Row to weight Watchers to Hymns and Hers.
Right, what is Hymns and her sort of bread and butter if you will?
Yeah, I mean for a long time it was a rectile dysfunction and hair loss drugs, okay, And so they really went after this you know, consumer market, consumer drugs that are popular and that maybe patients didn't you know, were embarrassed for whatever reason to go into their doctor and ask for these medications. They wanted a more discreete
online sort of service where they can get them. But then when they moved into weight loss drugs I think two years ago now at this point, that really became what put them on the map for a lot of people. I mean I still talk to people who weren't really paying attention to what Hymns was doing until they started selling weight loss drugs, and that was a massive boon for them over the last couple of years and really
a major growth driver. And then when that sort of ended that it became a question mark of sort of what was going to be that next avenue of growth for them.
So Nogo has a new CEO, right, Mike is it Dukeston Star? He was personally involved in these negotiations with Hymns and hers. What does that sort of tell you about this new CEO? I guess a much more hands on approach than some others might have.
Yeah, definitely. And the last sort of talks and issues really fell apart under Novo's last CEO, So Mike was kind of looking to bring things back and really, from what we understand, like shepherded this renewed partnership between the two companies. He was very involved him and the HYMN CEO Andrew Dudam spoke directly worked directly on reigniting this
partnership between the two companies. You know, Mike has taken a more aggressive approach than Novo has historically Novo's CEOs have historically because they've really lost out in the US market that they have helped create, and that is the most lucrative weight loss drug market, and he's looking for aggressive actions to get them back in the game, everything from M and A to sort of the approach that they're taking with these compounding pharmacies and with these eHealth companies.
And one of the things he has told us that when he took this job several months ago, one of the feedbacks he got from a lot of investors and analysts was that Nova wasn't making the most of this you know, consumer health e health market like in the same way that Lily was, and that was somewhere where
they could really improve things. So he's said that that's been a major push for them, even with sort of refreshing their own consumer health websites and the way that everything looks, just making it a better experience for consumer's patients. And so that sort of fits in with this same strategy with hims.
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We want to talk a little bit about some individual sectors, and here I'm really talking about consumer and high end.
Consumer, luxury consumer.
They are obviously impacted by how people feel when it comes to the conflict in the Middle East and how comfortable people feel about spending in this current environment.
There's a lot of uncertainty out there. What does that.
Mean for companies like LVMH what does it mean for the companies behind Cardier. Deborah Aiken is the luxury goods analysts here a Bloomberg Intelligence and joins us now from London, and Deborah, you've crunched the numbers and you say that this Middle East war will have a quantifiable impact on the luxury goods space, at least what was expected for twenty twenty six.
That's right, yes, So we went through some estimates and some data from third party sources. We started with Alta Gamma who having spoken to around nineteen sul side analysts, it'd looked at twenty twenty six and we saw that the highest growth was set to come from Middle East at around six percent, of which four and a half percent from locals and one and a half percent from tourists. And that was the fastest growth in the sector in a sector which we expected for twenty six grow to
forty five percent. So we then start to say, okay, what happens if we see demand coming off in the Middle East locally at around ten percent, and that gave us about a fifty big stent for every ten percent that was coming off, And given that we get a lot of that high wealth traveling abroad also to spend, we felt they could quite quickly across the year and dependent on what would happen around the area, with around one and a half percent shaped off that four percent
overall for the global industry.
Deb of the luxury names, the luxury retailers globally, is anyone particularly better positioned to sort of weather the storm.
I think we need to think about the biggest global makers and the most high end so we know companies like air Mares and Brunellocutionelli are running and expecting high single digital load double digit growth in twenty twenty six. Much of that comes from parts of Asia at the high end, very much from the US, part of Europe and the Middle East, so there's a very good mix there. And then also we could look at names like Richemond
for example, where Cartier is being growing very strongly. And Richemon incidentally is one of only two who give away their breakdown in Middle Eastern Africa. They have nine percent of sales from maa region prior to being the other with around four percent, which is where it is on average for the industry overall for Middle East Africa. But overall we would expect Rolexas and others to do very well with wait to lists, so high end jewelry and some of the high end leather goods or apparel makers
we would would do very well. It's quite interesting that into this geopolitical unrest for Q four there were some big names coming through with high single digital or double digit growth from the Middle East. So if things do continue for a long time, it does knock some of the growth away.
You mentioned jewelry and you mentioned leather goods. What about spirits? How is that different when it comes to the breakdown the categories within luxury.
So the only spirit maker that I closely follows my one of my colleagues covers the high end spirits. But I would be looking at what would happen within LVMH group. Their biggest exposures were out of Asia and the US and where they were doing very well again in Champagnes, doing better in wines, but spirits, particularly cognacs were difficult again for twenty twenty six. So the growth outlook there wasn't very strong.
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Long term bonials as they go, So go mortgage rates and so I want to bring in our next guest. She is Best Friedman, CEO at Brown Harris Stevens, to join us to talk about what's happening in the residential housing market and Best, I guess the best way I want to start things off is to kind of take a big step back and consider just how much international conflicts tend.
To affect the housing market.
Yes, we know they lead to hire bond yields and or they can lead to higher boniolds in this case, which could increase mortgage rates. But what does it mean in terms of demand overall for housing in the US?
Well, good morning, thank you for having me this morning. You know, I think it's just more volatility and uncertainty, and I think, you know, we've already had sort of a bit of a frozen housing market and some challenges with affordability, and this just creates a little bit more sort of concern for buyers who've been on the sidelines a bit, and so they may hold off. Even though we saw rates go down there lower than they were the thirty year from a year ago, which is good.
But this war is not really great for markets because you know, people don't know what's going to be and so it's it's hard to say what the impact will be. But you know, I think it's going to be slow and steady, and people are watching, and you know, when buyers need to buy and can buy, they do, Uh, and in this environment, it's sort of wait and see a little bit.
Is cash still king in the home buying market right now? Because we knew for a long time there was this trend of people who had the cash were using it. It was really hard for other people to go up against them and win in these bidding wars. Is that still the case or is that starting to you know, pull back a little.
Bit, you know, I'm still seeing the cash is king. Last year we saw you know, especially in places like New York City where you have discretionary markets, you know, where people are buying their second or third home, you know, cash is king. And we saw more than half the deals last year in New York City were done in cash. And so yeah, I think that goes a long way, especially because money is more expensive. So if people have the cash, they're using it to buy their homes. So
I haven't seen that mitigate at all. I see. I think people who can afford to and have cash are going to use it versus getting a mortgage.
And a lot of the people who have the cash tend to be international buyers as well. How present are they in this housing market?
Not seeing a lot of the international buyers as of late I see a lot of domestic people moving from within states, you know, like New York to Texas, New York to Florida. But that sort of thing about I don't see a huge international presence.
When you look at affordability across the map of the US, where does the buyer get the most value for their money at the moment.
I mean, that's so it's really hard to say. I mean, there's certain pockets and areas, you know, in different places of the United States where there are good you know, deals where there's ample supply. But you know, there's certain parts of New York, even New York City, where there's decent supply and people can and negotiate and and and really get something that makes sense, where the price per square foot is really a good value. Parts of Brooklyn,
there's parts of upstate New York and Florida. There's different areas. It really depends on someone's circumstances and what they can afford. But where you see tighter plate supply, like places like Palm Beach and Connecticut, that's where buyers are much more challenged. But there's certain areas, like you know in California, and different areas where there is decent there's a decent amount
of supply. It just really depends because real estate is so local, and it depends on someone's circumstances and what they can afford.
Yeah.
Absolutely, I mean one one town in one state will be completely different from another town in the same state. What does inventory look like when it comes to existing homes versus newly new construction.
You know, you guys probably have read this stat that we have a shortage of homes in the United States of roughly four million, give or take, and we have a real you know challenge and that we need to get more supply. So you know, builders are you know, not as quick to build today as they were, and
so we're not seeing the same incentives to build. We have challenges with zoning, and the people that own homes already are taking their time to sell as well because they have locked in rates that are lower and therefore they don't want to list in sell. So we have a challenge in both areas, and so you know, we're trying to do things like as you guys are probably aware of City of Yes where that was able to we're able to get something like eighty thousand new units
into the housing market. We need more legislation like that so that we can get you know, more supplying to the market. So new home sales are you know, new builder sales are slower, but you know, it's sort of a challenge in both arenas, in the resale market and in the new home market.
I'm wondering if it's going to if banks are going to get a little stingy when it comes to mortgages in the months ahead. And part of that I'm wondering is is might that be a knockoff effect of the cracks we're seeing in the private credit market. Are there any signs out there that make you think it's going to be harder for folks to get a mortgage in the coming months.
And seeing anything in particular, but you know, it's been somewhat slow. If you talk to mortgage professionals, they'll tell you that people you know, are taking their time where they're not you know, jumping into the housing market in the way that they were. There's a little bit more refinancing right now, but I'm not seeing anything via restrictions that are prohibiting people. It's more of you know, people feel they can't afford to buy their first time home.
The stat was something like, first time home buyers are now roughly forty years old when they used to be twenty eight years old, just you know, a little more than ten years ago. So people have been priced out of the American dream, as they say, and so hopefully we can come up with new incentives and ways for people to be able to get back into the housing market, things like city of yes, good legislation, up zoning, all those things. We need more supply. That's really the biggest issue.
You know, every article you read from economists, from law professors, they talk about the fact that we just we need more supply and we have to put more supply in the market. Freezing rents, those sorts of things certainly do not help the market.
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