Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside my co host Matt Miller.
Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moving news.
Find the Bloomberg Markets Podcast called Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. All right, let's get to the news of the day. It comes out of Washington, d C. Of course, former President Trump charged over secret documents, and which is a first for an ex president. We want to round table this thing. We're going to do that today with Bloomberg
Law host June Garasso. She's going to join us here in the studio, and Ann Mary Hordern Bloomberg Washington Carsponey usually in DC. Up here in New York at our Bloomberg Interactive Broker Studio. We appreciate getting both June and Anne Marie here and let's start with you. This feels different. I mean, it's federal. Can you put in context what's the feeling coming out of Washington, DC?
Well, this is definitely different. First former US president to be tried with committing federal crime. This is a case that even Trump's own Attorney General, Bill Barr, has talked about for months, really that this is going to be the more serious of the case. Also said it was almost one of Trump's own making. He said recently on CBS this morning. He was there two days ago. He said Trump was the one there, his words, jerking around the DOJ when he could have just given up these
documents that the National Archives wanted. And then you look at and June definitely will be able to speak to this more. The indictment what we're seeing so far, Obviously it's under seal that could be made public today, though it contains these seven charges, and some of them would normally carry I don't think anyone actually thinks that we're going to see the president behind bars for a decade, but some of them carry potential consequences of ten or twenty years behind prison.
So June, I want to bring you into the conversation breakdown more specifically what these charges.
Are well, and just a reminder that we don't know what the charges are specifically. This is all based on sourcing, has been under seal and it may not be opened until actually until Tuesday, when he reports to the court. But it may be open sooner. So there are several seven charges. They include wilful retention of national defense information, corruptly concealing documents, conspiracy to obstruct justice, and making false statements.
The conspiracy charge is particularly interesting to me because it means that there was someone else. There has to be two people involved in a conspiracy, so the prosecutors have someone else who they're either going to charge or who is going to testify against Trump and one of the possible people. When you think about the evidence that they have, they don't only have people. They have video and audio evidence.
And part of the video evidence is a man moving boxes into a storage boxes of documents into the storage space at marra A Lago the day before the prosecutors were set to arrive there. So they have lots of evidence.
They also have what's kind of incredible. They have an audio tape of Trump at his Bedminster golf club waving a document around and saying that it was a document with sensitive military information related to Iran in his possession, and he says that he knows, according to a transcript, he knows that he doesn't have the authority to show this. So they have lots and lots of evidence.
Hey, June, I just want to we got one little piece of news that started and I guess it's just going to come out and drips and drabs. But US Judge Aileen Cannon has been assigned to the criminal case. And I believe she is a Trump appointee. What does that mean to you?
When I was thinking of why they moved the case and the pros and cons of moving the case to Florida, I thought, Wow, I hope they don't get Judge Eileen Cannon because it's not just that she's a Trump appointee.
It's that she was the one appointed to be a special Master to review the material sees from mar A Lago, and she gave some I don't know, head scratching decisions that people were sort of shocked by, and one of them which prevented the FBI from using the c's classified documents as part of their investigation until she completed her review, which could take months, and that was ultimately thrown out. She was reversed by the Eleventh Circuit and there was
some sharp language in there about her. So she's in it for this initial part. If she stays on it, I think the Justice Department will have some problems.
Annriy want to bring you back into this conversation. How does all of this end up impacting his campaign? Is he's under indictment once again.
Yeah, it's going to be an even more wild ride, it feels like for the twenty twenty four campaign. So initially with the former president, anytime he faces a struggle, illegal hurdle, his numbers go up in the polls, and also his campaign dollars go up. There's a big question about this specifically because of how serious these charges are. Potentially how the other candidates, now it's much wider field
in terms of Republican nominations, how they react. What you already are seeing is I think one individual only came out and said they would pardon the former president, Vivik Ramaswami. He came out and said that's what he would do, and then others are taking a more moderate tone. Chris Christie, we know that he's almost running this race to just bash Trump, but he did say let's see the facts. I think all candidates will come out and say they're
presumed innocent like all defendants. But a big question and a litmus test for every nominee. Now, every question they're going to get whether they show up in Iowa, New Hampshire, South Carolina, is will you pardon the former president?
Okay?
And that's going to now shape I think a lot of the Republican field.
June can you give us. I know we haven't even seen the indictment, but on these types of cases, a sense of timing, how does this play out? And just to follow on Ann Mary's comments about the election, is this some thing a six month process, a twelve month process, a multi year process.
It's not multi year, And I mean it depends on how many motions there are before how I assume the Trump team is going to try to slow the process down with motions. Now, what's interesting is what the prosecution
did here. In order to prevent some of the most weight emotions, which would be a motion to change venue, they decided to go from Washington, d c. Where the grand jury was hearing evidence for months, to Florida so that the defense wouldn't be able to raise that as a reason to slow things down, throw the case out and move it somewhere else. But I mean it could come before the before the election. There's no doubt that
it could. There's also the other case in New York, which has which is I think supposed to go March. But and then you have in July or August. Do you have the district attorney in Fulton County going to announce possible charges against Trump. So you're going to have all these judges, you know, jockeying and trying to figure out when they could have a trial. So but it could happen before before the election for sure.
And Marie, any sort of indication from your sources about what the chances are for an actual conviction on this, No, I don't think we're even closer to that point.
There's one I think interesting wrinkle and June can definitely speak to this is I think everyone going into this thought it was going to be in Washington, in Washington, DC, And this is almost a coup for the former president that it's happening in Florida. This is his home turf. He has tremendous amount of support in Florida. He won
that state. And I think if it was going to the trial was going to be and the case was going to be conducted of Washington, his team had already said they would try to move it to Florida, and already they're already it's starting in Florida June. Actually, I wonder do you think that them coming out and moving it to Florida helps the former president or because they wanted to motion to move it, it actually takes one of their tools out of the toolbox.
Well it's sort of a double edged sword because it takes one of the tools out of their toolbox, which would slow things down, But at the same time, it puts him in a really favorable venue. You know, as you said, Floridians voted for voted for Trump, and you know he but he will not be able to say the things he said about the New York jury during the Eugene Carroll trial, how they were all against him, and he'll take that, will take his that talking point away.
But yeah, I think it's I think it was a calculated move by the prosecutors. They want to move the case along, so they want to avoid that venue challenge, but at the same time, the jury pool is not going to be as favorable to them, I think, although they are in Miami.
So but it could potentially move to West Pump.
Each Yes, it could, it could. This is all up in the air. Who decides that, Well, there might be motions by the defense to move it. And right now I'm not too sure where the judge Cannon is.
I'm not sure.
I'm not sure because we just found out about her a few minutes ago. So this is moving so quickly. But you know, there could be a motion to move it, or they could just decide that that's the better venue for it because that's where mar A Lago is.
So so, Henriy, what have we heard, if anything, from the Biden administration. What do we expect to hear from the Biden administration? How do we think they're going to play this whole thing?
So Biden was asked about this yesterday he was giving a press conference with Richie Suneck of the UK, and of course reporters always want to ask about the hot story of the day, and he dismissed any of these suggestions that a potential indictment of the former president would potentially be politically motivated, because that's what the Republicans are really going to want to coalesce around this message. And you already seen some conservative networks of news saying it's
Biden's doj going after the former president. So Biden said, you'll notice I have never once, one single time, suggested the Justice Department what they should do or not do relative to bring in charge or not bring a charge. He said, I'm honest. We also need to remember the current president is also facing a special counsel inquiry into
his documents that's still pending. But Vice President Mike Penn's former vice president his was actually concluded, there's very different You could draw a lot of parallels because everyone has these documents at home, but there's very different cases. I think Biden and Pence really wanted to get rid of them, while many were saying Trump.
Wanted to keep them. And as she said, what the Trump people have been saying, what Trump has been saying, this prosecution is by the Biden administration. All these different things about the witch hunt that's going to play. That's for the court of public opinion, that's for the jury pool that's out there, but that is not going to happen in court. As we've seen case after case, those kinds of discussions just don't take place and don't have an effect.
We're going to be talking to you, Drewne. A lot I think are the coming days, weeks, and months. All right, I want to thank Bloomberg Law host June Grasso and Bloomberg Watching correspondent Ann Marie Hordern, both here in our studios starting to get some initial analysis on what is going to be a very complex case.
Here, you're listening to the team Ken's are live program Bloomberg Markets weekdays at ten am eastering on Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, or listen on demand wherever you get your podcasts.
Let's just go right to the bond market. And why not, because again I've been saying you can after twenty twenty two, just when you got crushing equities, crush bonds. Four point six percent in a two year bond seems pretty good to me for the treasury market.
It definitely is, especially after the pain last year and looking ahead to next week's FED meeting. Look at these swap traders pricing in a roughly one third chance that we're going to see a FED hike next Yeah.
Absolutely, so that'll be top of mine next week and we'll have full coverage of that. Let's check with Natalie Trevithik, She's head of investment grade credit strategy at paid and regal. So, Natalie, what do you think about my trade. I'm just going to go put some money in a two year Treasury note.
I think that's a great trade, Paul, But I advise even going into corporate bond you get five and a half percent, so it's worth that minimal incremental risk to go into corporates.
So, Natalie, what is the bond market telling us about the direction of the economy at this point in what it can mean for the FED decision next week.
I think it's telling us that we're in pretty good shape. We've seen a pretty big rally in corporate bonds or almost back to the levels they were at the beginning of the year pre the banking crisis, and we've seen a big recovery in both banking spreads and equities, particularly among the regionals. That gives us some confidence.
So in the.
Investment grade space, Natalie, kind of how are you thinking about things? Are you going sector bi sector? Are you focusing more on duration? How are you guys approaching the investment grade space these days?
Yeah, it's a number of items. Definitely duration. We're seeing more demand for the long end of the curve. Even though those the front end, as you mentioned, is very attractive, we aren't sure how long it's going to last for so investors really want to lock in these ten and thirty year yields at these higher levels, and with corporate bond you're getting close to six percent there. Among the
sectors we do like communications technology. We think banking has a little bit more to run, particularly in some of the regionals, and those are most attractive in the front end of the curve.
What are you hearing from clients at this point as far as what their concerns are, and maybe concerns maybe they had at the beginning of the year, not so much at this point.
Yeah, the concerns at the beginning of the year was the recession, and they were already pricing in FED cuts and that's not going to be the case. We don't think right now. They're concerned about all of this treasury supply. We're likely to get posts to debt sealing resolution. People are talking anywhere from five hundred billion to a trillion of T bill supply this summer, and they're worried that mini crowd out investments in other places, such as corporate bonds.
So Natalie. One of the challenges for investors is trying to get a sense of where this economy really is going. So you know, when your analysts come to you or your pms come to you with an idea, do you ask them, Hey, have you run your recession model? And if so, how does this credit fair? Are Is that top of mind for you guys?
Exactly? Even though recession may still be you know, six months to a year out, if it does come, we are definitely running our recession models. How are these companies going to do? Fortunately, most companies have been well prepared. This is the most well telegraphed recession potentially coming, so they have started already to cut their cappex or cut dividends or share buybacks where necessary. So many companies are
defensively positioned. We've actually seen a number of upgrades back to investment grade from high yield this year, such as Occidental Petroleum recently.
When it comes to this concern about how the US debt deal would potentially trigger this one trillion dollar liquidity crunch, especially when we're looking at what's happening in bond market, what's your take on that.
I think it may be overblown because globally, investors are still flush with cash. We see that in the corporate market, where deals are like five times subscribed. Yesterday we had US Bank Corporate in the market with three and a half billion, and they actually had eighteen billion of demand for that deal. So it seems like the market will be able to absorb all of this T bill issuance.
Yeah, that's kind of where I wanted to go. Natalie's kind of the new issue market. As a former banker myself, I always like to see deals, the deal flow and who's coming to market and what kind of pricing they're getting, So, you know, even the rates are higher, it seems like new issuance is still pretty active. Is your phone ringing off the hook from our friends on Wall Street?
Yeah? Absolutely, The new issue market has been very active. First, there was a surge of issuance trying to get ahead of the debt ceiling, and the banks were kind of locked out of the market for a little while there
in March and April. Now that the debt ceiling is over, we've seen banks come back with huge issuance twenty seven billion this week, though there's still about forty percent under the rate of issuance they had in twenty twenty two, so we still expect to see a lot more supply, But now that regionals have been able to access to the markets this week, we think smaller regionals will start to come.
And how about that when you see some of these new deals, are they investor friendly in a sense that that some strong covenants in there or do you get a sense that it's more the leverage is on a part of the issue. Where are we in the market right now?
Yeah, an investment grade, there's generally not that strong covenants, but we are seeing investors push back on the high yield market to make sure the covenants are a little bit stronger.
Here.
We are seeing better concessions though in terms of pricing, and they're leaving a little bit on the table so that these deals perform in the secondary market.
I have to ask you about the yield curve. What do you think this is telling us about the economy.
Yeah, it's not a good sign. It's definitely a recession indicator, even though we aren't as inverted as we were in two tens previously. But I also think you know that the Fed's going to leave rates higher for longer, probably until twenty twenty four, and there's always the risk that the FED may have broken something, and we really haven't had a long enough of a timeline to see all
of these factions take place in the marketplace. The Silicon Valley Bank failure was definitely one indication that the FED may have gone too far.
Now, do you guys invest solely in the US or do you go outside of the US as well?
No, we invest globally, lots of emerging markets. We have a very dedicated team here on that.
All right, so let's go there a little bit. When you think outside of the US borders, kind of how do you kind of prioritize where you guys are looking.
We're looking at countries with stable governments. We're also looking at oil importers versus oil exporters. We're following the election cycle which is going on, so it's really bifurcated across from markets and.
We're talking about exporters versus importers for crude and things like that. Is it obviously that correlation with what we've seen, especially with oil prices in the US around when you're thinking about that sort of seventy dollars threshold there and what that could mean for the opportunities in those particular emerging markets exactly.
And we do think seventy dollars is close to a floor, so we aren't foreseeing a crash in oil, so we think the man is likely going to hold up fairly well. But it also depends on the depth of the recession if we get one.
So when you think about emerging markets, I'm not sure. And this is equities, it's credit, it's you know, you think about China. It's such a big part of the MSCI, I mean, is there How do you think about emerging markets? Where where do you find opportunities? Do you even think about China or do you kind of stay a little bit more close to home.
Yeah, China's a pretty bifurcated market because there's a very high quality end of the spectrum where you have such as the Ali Baba's and ten Cent good investment grade credits, and then you have the Chinese property market, which we're still a little bit cautious on. So it really starts to get down to a name by name basis even within these emerging markets.
Something I wanted to get your take on because we're going to get another update on the CFTC data this afternoon around three point thirty, and I noticed, particularly in the bond market, when it comes to the shorting that's happening on the US ten year, it's at a very extreme positioning. Usually that happens when investors are thinking that
yields potentially betting that they would go higher. But such extreme positioning, when I've talked to some sources, think that might have the opposite effect, ended up pushing yields lower and then maybe supporting more equity prices. Why do you think we're seeing such extreme shorting happening on the ten year right now?
Yeah, it's a bit of a mystery. I think there's all this positioning and jockeying ahead of the FED meeting, But it does seem that, like post these sped decisions, sometimes the bond market moves in opposite directions than what you would expect by the statements, and some of that's driven by the short positioning being offset afterwards.
All right, Natalie, for me, next Wednesday is Flag Day, but for others in the market, it's it's FED Day. What is your foot or reserve going to do?
Do you think it's But we think there's a strong likelihood they make a one or two more times, so the July meeting is very active.
All right, Natalie, thank you so much. We appreciate that. Natalie Trevithick, head of investment grade credit Strategy at Payden and Regal.
You're listening to the tape. Catch our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, the tune in app, Bloomberg dot Com, and 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.
Hey, you're darn right. Focus on munis is brought to you by the New Deal, which created American infrastructure that at leashed a new opportunity. Today we're doing it again with massive investment in modernizing our infrastructure and municipal bonds backed by Build America Mutual. They help make it happen. Invest in the future of America with BAM in short bonds that I did my best. It's not nearly as good as Matt Miller, but he was just walking by
and he knows it's Thursday. He knows it's eleven nine Friday. He knows it's eleven oh nine, and he jumps right in because he knows that's time for muni's Joe Myisk joins us here in the Bloomberg Interactive Brokers to studio. He is the head of all our municipal research. Joe, what's happening at there? We've got rates moving higher. What's going on in the world of municipal bonds?
You know, we have a lot of stuff, But the biggest news I think this week was we uh snapped the sixteen week streak of outflows, outflows into municipal outflows from municipal bond funds. We saw four and sixty million come in this week.
It's the catalyst there.
We're getting higher yields, We're getting this this higher coupons out there. There's also, let's face it, the relief from the you know, the debt limit you know being passed. So there there is that very much that you know, things are it looks like things are. There's more it's more constructive as the analysts.
Why were there so many we of outflows?
Oh, you know, there was everything to worry about. First of all, you have the FED and there still is uncertainty about the FED because you know, we're caring stories about you know, FED is probably gonna uh you know pause next week. Well perhaps not. So there's still a lot of uncertainty in that area. Uh, And that's that
was the biggest reason for the outflows. There was also you know, the debt limit's been hanging over the market now for probably month and a half, two months, so you know, between those two things, that's why people were clearing out. And you know, two we had, you know, you were getting loads of deals priced with two three percent, four percent coupons, not exactly h enticing. But now fives five and a half's we're kind of back to really formula of and higher.
I gotta call my guys.
We're kind of back.
Jersey's coming out with any stuff that kind of cooping. I'm jumping back in the market.
Oh yeah, but but now you know, five percent coupons and you know we're in uh you know, I want to say it's a it's a better place. Plus, you know, right now, very little volume in our market. You know, I think we're down. We're about one hundred and fifty billion, which is off about twenty percent. And if you're talking about number of Issues are probably off thirty percent. So there's not exactly a lot of.
Pressure, is that because rates have gone up and Issues don't want to sell those?
Right?
Yeah? But I thought, I thought the issues you've always told us they don't care what they got to pay.
Well, they know if they have to come to market, they'll come to market. But so many of them don't have to come to market because they a lot of them still have the COVID relief money, or a portion of it. It still hasn't all been allocated.
So what about when we were talking about SVB and when it came to that seven billion dollar Beauni portfolio seen as basically requiring this sort of deep concession. What's happening with that?
Well, I think it was black Rock is running the UH is running the municipal bond auctions, and I know they've sold off a good portion of that already. But they're not gonna you know, they're gonna dole it out a little at a time. You don't, uh, you know, just say all I wants, Oh, here you go, mini market, here's you know these billions for you. No, it's a
little bit. We'll dole it out that way. But you know, as we quoted an analyst this week saying, uh, you know, the banks were really caught holding a lot of low coupon stuff, you know, two percent, three percent, and all I took a big hit with the Fed, you know, making its move the last couple of years.
All right, let's talk one of my favorite topics, which is Las Vegas. Professional sports teams have been flocking there over the last several years. First we had the hockey team. I can't even think that at the end the finals, I think, I don't know. And then I watched and then football there the Raiders, and now the Oakland A's are coming down. They need a stadium, Joe, and I'm just guessing that this is going to require a little bit of public financing.
Oh yeah, we have at least three hundred and eighty million dollars in various subsidies and tax breaks and infrastructure construction that are rolled in there. It's the total. I think it's a one point five billion stadium. We've been calling it.
And uh, this week.
We had Max Adler right about the Nevada lawmakers have been called back into session second special session to discuss the financing package for the as I I am in no talent that this is going to pass. Yeah, because Las Vegas is just such a.
They're printing money out there. I can't imagine this won't get approved.
No, I I yeah, this is this is, This has gone.
Through any sort of timetable as far as when we could find out when that may happen.
Oh, this is going to be uh you know, certainly within the next couple of weeks. And then they you know, set up the various parts of it, including the actual bond issue, which I know that mister Sweeney.
Wants to got a part of totally. I mean, I'm just looking. I've been to a couple of Yankee games out in the Oakland Stadium. Man, that thing is ancient. I mean it is rough, and nobody goes to those games. It's not as bad as Tampa Bay maybe, but boy, it is rough out there. But and it's for such a great city. It's just brutal. But I think we're finding out in that Bay Area market can't really support two franchises, whether it's football, whether it's baseball.
That's what it looks like.
Yeah, but you know the Warriors, you know, they moved to a great new arena, in downtown San Francisco, right by the water, right by the pack Bell Park, which is I'm not sure what it's called anymore, but so that's a great area downtown San Francisco. But it looks like, you know, the age, you're going to Vegas and the public's gonna pay.
Up little bit here.
Oh yeah, and I think that I bet you those bonds will be snapped up.
Oh easily. You know. In fact, I wrote about a bond issue out today, call them out today for the El Paso Chihuahuas. Whoa triple a El Pasoxes.
Yes they were.
They were going into the action today fifteen games back in third place behind the Oklahoma City Dodgers.
So they're coming up with the bond deficiently.
Yeah, they sold bonds earlier on for dis service savings. But could you imagine, you know, you get your you know, you're making your way up in the minors, and and you get to say, I'm a chiuaa cha.
All right, So how are the fund flows into muni's. Are you talked to that that we have some funds for the first time coming back in Do you expect that to continue or one of the folks in the market talking ylloid, I.
Would expect it to be coming back in now. And you know, as I say, you have higher yields, there's relief over the DEAT limit being passed, and you know you do have year to date. I know you're always as this performance over two percent.
Over two percent, and that's you know, and then you get the tax adjustment there it's even better, say stuff.
So yeah, so I would expect that we're going to see more inflows. And there's nothing on the horizon. I mean, there's no big muni disaster on the horizon, you know that throw people off the game.
All Right, I'm gonna call my guy to make sure he's on the lookout for some new Jersey muni's I like to say, coupons. I'm hearing about it exactly, Joe. I guess what, No, that's it. That's it. The end of our time together for this week. Joe Misich he covers all things municipal bonds for Bloomberg Briefs for our weekly update, which we always save for Friday. On the municipal bond market against the host of return this year after twenty twenty two, or the whole fixed income space
was just ravaged in terms of negative performance. We're going more coming up. This is Bloomberg.
You're listening to the team Ken's our live program Bloomberg Markets weekdays at ten am Eastern on Bloomberg dot Com, the iHeartRadio app, and the Bloomberg Business App, or listen on demand wherever you get your podcasts.
You know, just when we want to talk about the worlds of technology and media coming together, we've got some good people to talk to.
Want to see our next guest exactly.
Mark Dougas president's CEO of Mountain Joints, is here.
Hey.
Mark, I want to ask you about what, to me has been one of the bigger news stories of this week, which is the merger of the PGA Tour and Live Golf. I mean, it just shocked the world of golf. It shocked the people who follow the business of golf, and I bet it was kind of a shock to some of their media partners as well. What's your take from your perspective and kind of the media slash tech zeitgeist.
Yeah, so, first thing, I think if you spend time in the Middle East, I coincidentally have been in Dubai for ten the last ten days and this part of the world is just absolutely booming. It started with Dubai. I actually went to Dohag Guitar this week, which is also a much more traditional city than Guitar, but also booming. The people there are very happy, at least everyone I talked to was laughing and just really happy. And so it's very different on the ground than the image I
think that folks have of the Middle East. And there's been a lot of evolution over the last two decades, and so Saudi Arabia is following that lead. All of a sudden, it's becoming kind of trying to become a
tourism location. Obviously, I think for a lot of people in America that's kind of like not the first place that come the mind for where to go to a vacation, but they, I think, are determined to spend literally hundreds of billions of dollars to you know, kind of adjust their cultures, their their image, and to make Saudi Arabia, long with Dubai cant Are another city, is kind of
an attractive place to go. And I think this deal the reason I said all that, I think this deal is essentially a part of that, and in fact, the amount of money involved in a deal is almost like a rounding era in terms of the entire investment that they're determined, Like there are single buildings in Dubai that
costs the value of this deal. So so, I mean, I think it's great for the game of golf, Turning golf into a you know, kind of more of a team sport, making the players be a little less prize oriented in terms of how they make money and more kind of salary plus bonus oriented. I think it's great for the players, and I think it's going to expand
the game. It's going to take some time, but I think it's going to we turn this game into something that a lot of people see as a more serious sport for the people who are not currently followers of God.
What's the feeling, Yeah, well, what's the what's the feeling over there? Mark from some of the negative response that we've seen about just live golf in general, the role of the Saudis and live Golf, and and some of the feedback from even some big players like Roy McElroy and and those that didn't have not to date supported live what's the feeling over there in the Middle East about that?
Yeah?
I think they, I think they understand it, but they think that Americans are kind of looking in the past. You know, most of like I said, the tourism here and the people you see are more from Europe. You don't really see a lot of American as many Americans
walking around. So I think they their perspective is, look, we you know, we we we've blended our culture with Western culture and and do so We've made ourselves way more attractive to Europe and that will eventually happen to America as they as they you know, like meet us as individuals and realize that we are very friendly to the to the rest of the world and not this kind of extremist.
Image and actions.
You know, you can that that happened in the past. So so I think they think time will will make this work, and and they're patient, they're they're ready to invest the time and the money to make it happen.
Since you work in the advertising software type space, what do you think a deal like this could mean, particularly for advertisers moving forward.
Yes, Well, all the big money in sports actually comes from things like TV rights and when you talk to like some of the biggest agencies, the biggest issue they always have is getting more sports content. They want their advertisers want to advertise against more sports. So I'm talking like the WPPS and Group and and agent the big agency holding companies. So you know, the sport needs to kind of live up to the vision in the steel. But I think people are very encouraged by one interesting thing.
We've been playing with a mound and this is almost like just an internal project. We look at a golf game and we look at and we go look at all that advertising space, like it's just all that green on the screen. And we've been we've been playing with ads that just like like show up on the on the lawn like just I think, so there's a lot of fun you can have with the technology, like by
creating a space. But I think people anywhere you can get more sports content to advertise against, you're gonna get enthusiasm from advertisers. And that is you know where the big, big money comes in sports. It's like the huge sports deals, especially if golf starts to become more of a team sport than less of a little less of an individual sport.
So to that end, I mean you're tight with the advertising community, the tech community, the intersection of that type of thing we had. Are you surprised we haven't seen you know more, you know, a tech company of size jump into the deep end of the pool and really get into content. So for example, you know, try to really bid for a major NFL package or Sunday package or something like that. I think about like Amazon Prime
for example. You know, they've got a huge block of subscribers, They've they've got you know, bottomless pit of of of money. They're they're into the you know that the content business. But what one could argue they're not in commensuratey size. How do you think about that?
Yeah, I think the the economics on that are just not very attractive. I mean, it makes sense for the big content networks like an NBC and others to bid on things like the Olympics and the bid on you know kind of NFL and so forth. But I think it's much harder to get Netflix. I think Netflix is kind of one of the prime examples. They've never had sports to my knowledge any right, well, what they've done
an end a round on sports. I just was on I just literally locked into my Netflix account and they have like they have Formula one. They you know, an annual series. They now have one on bike racing, the Tourder France, and so they've come into it at much lower costs and ironically have helped expand those sports without having to commit literally billions of dollars to do it. I just don't think the economics fit. The economics at tech companies typically love which is very high margin with
relatively low investment. So it's going to take some time before they jumped into the content game, where it's very high investment and arguably much much lower margin to you know, high much higher risk to get there.
So the ad tier for Prime Video streaming service at Amazon, that's going to be tough.
Yeah, I think Prime that I don't think that's much of a news story. I mean the one of the last. The thing about Prime the single biggest issue and that this is coming directly from executives at Amazon, you know, and conversations on that. The single biggest issue is most
prom subscribers don't know they have Prime Video. They just literally don't know they got they got Prime because they want fastest shipping and free shipping on every order they did, and then it's and so they their single biggest issue like the Prime does advertise the advertisement or the remind you that you have access to Prime Video. So I
think so it's kind of a very unique situation. And to a certain extent, I think that them having an ad supported tier maybe as much as like you need your subscribers to put some skin in the game for the actual video, Like if you want them to know they have it, they have to maybe pay for it,
you know. I think that's what they're paying for. So I think Prime is just a very unusual content source, and Amazon clearly watched offset some of the costs and get more like knowledgeable adoption of Prime Video as opposed to like this time is currently mostly passive adoption of it.
All right, Mark, always good to check in with you. We appreciate you making a time all the way from the Middle East. Mark Douglas, President and CEO of Mountain, just talking about the confluence continued confluence of technology and media.
Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews in Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three and on fall Sweeney.
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