June 5, 2025 • 32 mins
Hell hath no fury like Elon Musk scorned. Messy breakups grabbed headlines this week, with the strange and storied bromance of Musk and President Donald Trump rather predictably ending in tears (and a series of incendiary social media posts). Musk fired sharp criticisms at the White House-backed tax bill for being fiscally irresponsible. “Bankrupting America is NOT ok! KILL the BILL,” wrote the richest man in the world.
Indeed, love and loss dominate this week’s episode of Everybody’s Business from Bloomberg Businessweek. Hosts Stacey Vanek Smith and Max Chafkin dive into the so-called big beautiful bill to look at the economic impact Musk is supposedly so worried about, and why America’s love affair with debt could prove the republic’s downfall. The proposed 2017 tax cut extension would add an estimated $2.4 trillion to the country’s almost $37 trillion in debt over the next 10 years.
Musk isn’t the only titan of industry having a big week. Taylor Swift recently announced she had taken full control of her music library, marking the end of a years-long battle. “I’ve been bursting into tears of joy at random intervals ever since I found out that this is really happening,” she wrote. Bloomberg’s Lucas Shaw joins to hash out the long, tortured breakup between Swift and her record label, and how the fight over her rights helped make Swift the superstar she’s become.
Finally, it’s time to pour one out for the open tab. Bars are reportedly complaining that young customers aren’t leaving them open like they used to. A number of culprits of this curious behavior are explored, including Gen Z’s alleged struggles with commitment. (If you can’t even commit to handing your credit card to a bartender, how will you ever lock it down with a future partner?).
See omnystudio.com/listener for privacy information.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Stacey Mannix Smith.
I'm Max Chafkin, and this week Max all about eras.
Speaker 3 (00:17):
Yes, Stacey, the Eulon era is ending in Washington, DC.
Speaker 4 (00:21):
We're going to talk about the deficit era. These gigantic deficits.
Speaker 2 (00:25):
Not ending in Washington, DC.
Speaker 4 (00:27):
And my personal favorite era, the era of Taylor Swift owning.
Speaker 2 (00:32):
Your own music, Yes, Taylor's version.
Speaker 3 (00:37):
How are you, Stacey?
Speaker 2 (00:38):
I'm doing pretty well.
Speaker 5 (00:39):
How are you? So?
Speaker 4 (00:41):
There's been all this talk about kind of macroeconomics right now.
Oh yeah, there's the deficit, there's the bond market, the dollar,
and it's kind of left me a bit at a
loss to figure out what to say beyond there's so
much volatility right now.
Speaker 5 (00:56):
Yeah.
Speaker 2 (00:57):
The Trump administration has been making all these big moves,
which is making up big global macroeconomic markets. It's got
people behaving in all kinds of really interesting ways. One
of the ones that I've been tracking, and you know this,
I love watching the price of gold.
Speaker 4 (01:13):
Stacy is like she's got her bars in her bunker.
Speaker 3 (01:17):
She's ready to end the fence.
Speaker 4 (01:19):
I go back exactly, the resident goldbug on everybody's business.
Speaker 2 (01:23):
Well, what I think so fascinating about gold is it's
one of those investments that is a little fringy, but
it is something people gravitate to when there's a lot
of uncertainty.
Speaker 4 (01:33):
I mean, it is fringing in a way because like
most people would not have it be like a major
part of their portfolio unless you're watching like late night infomercials.
But in a other way, it's not fringing at all.
It's kind of like the original investable asset.
Speaker 2 (01:48):
No, that's very true. And the price of gold right
now is at a record high thirty five hundred dollars
an ounce almost, which is just kind of insane, but
does speak to this moment that we're in. And I
actually wanted to sort of talk to people who maybe
weren't in finance and investing about what their impression of
gold was right now. So there is a museum exhibit
(02:10):
at the Brooklyn Museum called Solid Gold, which tracks gold
through the ages and our culture's relationship with gold, and
so I ask people coming out of that exhibit, like
what they thought of gold and what their impression of
gold was right now.
Speaker 6 (02:23):
Gold to me, it represents technique skill. It really is
a timeless metal.
Speaker 3 (02:30):
So royalty, you know, that's the fine of it.
Speaker 2 (02:33):
Do you guys like invest in gold or own gold stuff? No?
Speaker 3 (02:38):
Gold is not my color. So normally.
Speaker 7 (02:41):
I do own a bit of gold, but that's mainly
because of like parental pressure and from India. So gold
is seen, it is like staple. It's never going to
go down in value.
Speaker 4 (02:53):
I think gold is a pretty safe back because for
some reason it's always relevant.
Speaker 5 (02:57):
Do you own gold?
Speaker 2 (02:58):
Do you invest in gold?
Speaker 5 (03:00):
No? I don't, Now it's so expensive.
Speaker 4 (03:02):
I'm a musician, so I'll work and I won't work,
but it's not a steady job.
Speaker 2 (03:06):
Do you have any gold records?
Speaker 5 (03:08):
No?
Speaker 6 (03:08):
If I did, the whole different story.
Speaker 2 (03:10):
What do you think is like a safe place to
put your.
Speaker 6 (03:12):
Money as far as investment, life experiences? Coming to the
Brooklyn Museum.
Speaker 2 (03:17):
That's the kind of gold that you can't buy that, I.
Speaker 3 (03:22):
Mean, great answer, I know. Can you just explain why
people are buying gold?
Speaker 4 (03:27):
Because the thing is most people their investments, whether it's
real estate or stocks or life experience, those are also
hedged against the price of the dollar.
Speaker 2 (03:36):
That's a good point.
Speaker 4 (03:37):
So why would you want to buy this like volatile
asset that's hard to sell and that's kind of heavy.
Speaker 2 (03:43):
Well, you're right in the short term that it's valible,
but over time, gold is probably the one of the
oldest stores of value. So people like it, royalty people
like it. But I think at times when there's a
lot of confusion over the value of stuff, so like
stocks are doing well, but they've been way up and
way down the dollar. People are worried about because of
(04:05):
all the potential inflation because of tariffs. There's been so
much uncertainty in the Trump presidency with tariff policy, with
global relationships that I think people are just nervous. And
gold is like a little safe haven. It's like this
little bunker of value.
Speaker 4 (04:22):
I think that the Life Experience guy is right, the
point of the Brooklyn Museum is where the real gold is.
Speaker 3 (04:28):
I feel like I might need to see this exhibit.
Speaker 4 (04:34):
All right, Stacy, let's talk about the one big, beautiful bill,
one thousand plus pages.
Speaker 3 (04:40):
Great name. Yeah, this bill.
Speaker 4 (04:44):
Top line thing extending the twenty seventeen Trump tax cuts,
which we're supposed to expire. But then you have a
bunch of other things. You have new tax cuts, You
have cuts to Medicaid and food stamp programs to pay
for the tax cuts. You have no tax on tips.
You have some random trolley stock that's just sort of
thrown in there, tax cut for gun silencers, preventing medicaid
(05:04):
dollars from going to planned parenthood. Then you have some
kind of random Trump priorities that seem to have nothing
to do with taxes, Golden Dome, funding for deportations, taxing
college endowments, drilling on public lands, no more evy tax credits.
It goes on and on. Like I said, a thousand pages,
I wanted to talk about this that's a beefy bill
(05:25):
because it's really it's a tax bill. But like you've
been doing a lot of reporting on taxes and the
way I guess people feel about them, what they mean
for our budgets, our personal budgets as well as our
government budgets, and I kind of just wanted to get
your take about what is in this bill first of all,
and like why it matters.
Speaker 2 (05:45):
Well, first of all, it's kind of fascinating to hear
you run through all the litany of stuff in the bill,
because it is formidable. I would say the crux of
it is that this bill does extend the twenty seventeen
tax cuts. But the major concern here is how expensive
it's going to be. It's going to add a lot
to the deficit.
Speaker 4 (06:03):
Hold that thought because one thing I thought we could do.
It seems like everyone's mad at this bill. So Elon
Musk he's been going through it, and there was a
press conference last week on Friday, during which Musk left
the White House. Trump thanked him, said we're gonna stay
super close. It was all very amicable, I guess, except
(06:25):
for the black eye that Elon had for some reason.
But anyway, in the days that have followed, and we're
recording on Thursday, June fifth, things have gotten very acrimonious.
Speaker 3 (06:35):
Musk has been.
Speaker 4 (06:36):
Attacking the big beautiful bill. He's been essentially saying it's
full of pork. Trump went off on the Oval Office
accusing Elon Musk of having Trump derangement syndrome, which is
very funny, and then Musk on Twitter essentially keeping the
fight going, saying that Trump wouldn't have got elected without him.
So that is going on, and Musk is not the
(06:57):
only person who's mad about this. Publicans are mad Democrats
are mad. I thought like one exercise would be to
kind of go through what they're mad about. And I
think the first one, of course, is the deficit. Do
you know, off the top of your head of how
much the deficit bill is going to be if this thing.
Speaker 2 (07:13):
HAPs to yeah, over the next ten years. This is
always how they calculate these things. The tax bill will
add and estimated four plus trillion dollars to the deficit,
which is huge.
Speaker 4 (07:23):
Yes, that's like the CBO estimate for the tax part
of the bill. The estimates sort of range from, like
you said, four trillion maybe down to two trillion or so.
But the thing is, there are all these temporary tax
cuts in this bill, like the no tax on tips,
and if those become permanent, then it's up to five trillion.
So it could actually be greater than even the estimates
(07:44):
are saying. And Elon Musk has been on a heater
about this. As I said, we've also seen a bunch
of Republicans, ran Paul Thomas Massey, a lot of Wall
Street folks.
Speaker 3 (07:53):
They're all talking about deficits in sort of very dire terms.
Speaker 2 (07:57):
Yeah, well, it's all the kind of old school republics
who are sort of fiscally conservative, small government. This bill
is definitely the opposite of that. But it is a
tricky situation in fairness, I think because the tax cuts,
if they expire, we will experience them. Most people did
get a tax cut, I mean it's not quite evenly distributed.
(08:18):
So middle class households that's people making roughly between seventy
five thousand and two hundred thousand dollars got on average
at tax cut of about one thousand dollars in twenty seventeen.
And really wealthy people got a tax cut of on
average like seventy thousand dollars. But you know, percentage wise,
it was sort of on track. And if you let
(08:39):
them expire, most people experience this as a tax hike. Yes,
and for middle and low income families, like a thousand
extra dollars is a big deal, so it's tough.
Speaker 3 (08:47):
And if you're rich, seventy thousand dollars also. They hold
that thought though, because.
Speaker 4 (08:51):
I want to go through the other two main areas
of madness. Okay, so the other one is the actual cuts. Right,
Although this is a bill that increase the deficit, they
are making some effort to cut things back and The
main way they're doing this is Medicaid, that is the
health program that the United States has for poor people.
And what is happening is the bill would make it
(09:13):
so that there are work requirements for Medicaid, so that
people would have to prove that they are working a
certain number of hours each month.
Speaker 3 (09:21):
The challenge here.
Speaker 4 (09:22):
Right, is like, how do you prove it is everyone
able to do the requisite paperwork? And there are independent
estimates showing that something like eleven million people will lose
their health insurance if that happens. Now, that has a
bunch of Democrats mad. You could understand that Democrats, of
course have been historically the party of expanding health insurance
(09:44):
with public programs, but many red state Republicans are also
mad about this. Josh Holly, very conservative senator from Missouri,
called the idea of cutting Medicaid morally wrong and politically suicidal.
Speaker 2 (09:57):
Yeah, I mean, healthcare is already such a huge shot
button issue in this country, and Medicaid in fairness is
one of the bigger expenses in our budget. But even
those cuts are not going to make up for how
much the bill costs.
Speaker 4 (10:10):
And then the last one, Now this is more conventional
they're cutting some very specific programs, including these green energy programs,
which Trump kind of ran against and hates, but a
bunch of Republicans are mad about because their states have
benefited from some of these programs.
Speaker 2 (10:28):
Elon Musk himself has benefited from a lot ils us.
Speaker 4 (10:31):
While he has on one hand sort of wringing his
hands about the deficit, his companies and even he at
times has been sort of complaining that they're losing these
tax credits. So he's like talking about quote unquote pork,
but like he just he wants his pork.
Speaker 2 (10:47):
Yes, Well, I feel like, honestly, that is the problem
that we're running up against with the deficit right now
and taxes is that there is no party. I do
not think the Democrats or the Republicans are in in
the situation that actually wants to bring the deficit our
debt under control. Everybody just wants to spend that money
(11:07):
in a different way. Even the Democratic proposal, which would
keep in place the tax expiration basically, I think the
top five percent would see their tax cuts expire, Like
forty five percent of the cost of the tax bill
would go away if you just let the tax cuts expire.
For like the top five percent of earners. But then
(11:30):
the Democratic Party wants to also spend it. Nobody wants
to deal with the deficit. That is like the only
thing uniting the parties right now.
Speaker 4 (11:37):
And it's not just that, it's like no one can
even admit that these tax.
Speaker 3 (11:42):
Cuts are part of the deficit.
Speaker 4 (11:44):
You know, over the last couple of days, Mosk and
his friends and so on are are getting mad. And
the thing that they're fixating on, I know this is
gonna send you over the ledge. They're fixating on this
part of the debt limit because it raises.
Speaker 3 (11:57):
The debt ceiling, the debt ceiling to five trill.
Speaker 4 (12:00):
They're saying, well, we need to pass the tax cuts,
but we can't raise the debt ceiling this high.
Speaker 3 (12:05):
And as you know, that's just oh in cohero.
Speaker 2 (12:07):
That is a constant, huge fight, one that has caused
the credit rating in our country to go down because
there's such a risk of the US defaulting on its debt.
Why would you tie that perennial battle in with something
this big. It does not seem like all right.
Speaker 4 (12:24):
Now now, this is probably where I should say that
the administration has kind of responded. Russell vote who's the
head of OMB, the Office of Management and Budget. He's
an administration figure in a way, an ideological ally of Musk.
He went on TV and he tried to make the
case that these estimates are just wrong because they are
(12:45):
calculating things using this false, you know, ideological math.
Speaker 8 (12:49):
When you assume the extension of the president's tax relief
from twenty seventeen, this budget or this bill, and it's
really a reconciliation bill. It's not really a budget bill.
It is using a budget process. This is a one
point four trillion dollar over ten years deficit reduction.
Speaker 2 (13:08):
Well, that's like me saying, if I don't count my
Giant Chase credit card bill, it's just all profit.
Speaker 4 (13:15):
One thing I've wondered about Stacy's like, if these deficit
hawks are right, when do normal people start to notice?
Speaker 3 (13:22):
How bad? Can you make the case that this is
actually bad?
Speaker 2 (13:26):
I love this question because our country is in like
thirty trillion dollars worth of debt right now, and it's like,
you can't even imagine that amount of money, And it's like, well,
I don't know. I just want to live my life
and pay my rent. It's what does that mean? So
I think the real issue here is how expensive it's
getting to service the debt. Like the interest we're paying
on the debt right now, that's the size of the
(13:47):
defense budget. But apparently within a decade, one third of
all the taxes we pay are going to go to
servicing the debt, which means that's money that can't go
to growing our economy or fling potholes or expanding healthcare
programs or whatever you'd want to do with that money.
It just it's becomes so unproductive. It would be like
(14:07):
all of my incomes going to paying my credit card bills.
I can't make investments, I can't grow. It starts to
really shrink our economy and really cripple the government.
Speaker 4 (14:16):
So the issue is that the government loses the ability
to do things and then our lives to grade or.
Speaker 2 (14:21):
The economy starts to shrink because it starts to sort
of basically become our economy. Servicing the debt becomes our economy.
Speaker 4 (14:29):
All right, So let's talk about what do you think
is going to happen here, or what we think is
going to happen.
Speaker 3 (14:33):
Trump wants this done by July fourth. We're seeing not
necessarily great size that that is going to happen. But
I think everyone sort of.
Speaker 4 (14:41):
Assumes that these tax cuts at least have to be
extended for the reasons that you mentioned, because yeah, everyone
will be too mad. Jamie Diamond went on Fox Business
and he was sort of talking about like how bad
the these deficits are and the bond market and this
and that, and then he basically says, yeah, but we
just need the tax cuts to be extended because we
need that for the economy, and we'll deal with the
(15:02):
deficits after we get that done.
Speaker 2 (15:04):
I think this is the real issue. No one is
dealing with the deficits. I talked with this economist, Jessica
Riedal from the Manhattan Institute, which is a pretty right
of center think tank, and she says she's been talking
to politicians on both sides of the aisle and that
the one thing everybody agrees on is that they don't
want to deal with this. Here's what she told me.
Speaker 9 (15:24):
I brief members of Congress very regularly, and I walk
them through the budget slides and the data that our
fiscal outlook is unsustainable and we are heading towards a
debt crisis that's going to be terrible for the economy,
and the response I usually get is I understand and
(15:45):
I agree with everything you have said, but I will
lose my seat if I don't keep voting for the
gravy train.
Speaker 2 (15:53):
Spending money is more fun than not spending money. Spending
money greater than not spending money. Always so, Max, one
of the biggest business titans in the country is having
a very cool summer. I know you know what I'm
(16:13):
talking about because you know it. He's shocking amount about
Taylor Swift.
Speaker 3 (16:16):
That was cruel summer. Was that what we were doing?
Speaker 5 (16:17):
Yeah?
Speaker 2 (16:18):
I was doing a cruel summer, mister Egg.
Speaker 4 (16:20):
Yeah, this is huge because if you have been following
Taylor Swift for the last I don't know five years,
this battle over her music rights has been kind of
the defining artistic thing, even more so than the relationship
with Travis Kelcey, the breakup with that guy from England
whose name I don't remember, Ate Jillen Halgate, this question
(16:42):
of the scarf, it's all kind of subservient to this
business question.
Speaker 3 (16:47):
It's an ideal topic for us on this podcast.
Speaker 2 (16:50):
It is, and here to walk us through this whole
torture tale is Lucas Shaw. He covers Hollywood and entertainment
for Bloomberg. He writes the excellent newsletter screen Time.
Speaker 5 (16:57):
Hey Lucas, thanks for having me.
Speaker 3 (17:00):
So Taylor Swift just.
Speaker 2 (17:01):
Scored this kind of major business victory, and the winners
and losers here were pretty surprising. Taylor has just acquired
the rights to her first six albums from this private
equity group called Shamrock Capital, and that essentially means she
controls all of her music and music videos and unreleased
works from those albums. So take us back to the
beginning here. Where did this bad blood start?
Speaker 5 (17:22):
Oh?
Speaker 1 (17:22):
Boy, Well, you could argue that it started the moment
she signed her initial deal, which was back and I
want to say like six or something, just because the
way the music industry works, she signed a deal that
gave Big Machine, her initial record label, the rights to
her first six albums. But in the case of this dispute,
it really started when Scott Borschetta, who owned Big Machine,
(17:44):
decided that it was time to sell because Taylor Swift
was leaving. So Taylor Swift finishes those first six albums.
Speaker 5 (17:52):
She was one of the.
Speaker 1 (17:52):
Most successful pop stars in the world nineteen eighty nine,
which I believe was the fourth of those six, but
don't hold me to it.
Speaker 5 (18:00):
Been one of them.
Speaker 2 (18:00):
Oh that's the big one with like Shake It Off.
Speaker 1 (18:02):
And one of the best selling albums in modern history.
And Taylor Swift, having completed that contract, decided that she
wanted to own her future work because the way the
music business was structured had changed. Historically. You know, labels
had really owned and controlled everything, but because of a
lot of changes related to the Internet, in large part,
(18:24):
it has become much easier for artists to demand ownership,
and she was going to get that in her next deal.
She also wanted her previous albums, and so there's a
lot of sort of disagreement I think about what exactly happened,
But what it boils down to is Taylor Swift might
have resigned a big machine had she been able to
get her first six albums back. Scott Borchetta placed some
(18:44):
limits on that, like her earning it out by signing
new things. Instead, she goes to Universal Music Group, the
biggest music company in the world. They say that she
will own all of her future work and they just
license it back from her for a period of time.
And then Scott Borshetta looks at this and says, Okay,
Big Machine is added to most valuable that's ever going
to be because Taylor was her biggest star. I need
(19:05):
to sell this. He sells Big Machine to a music
mogul manager named Scooter Braun, best known as the guy
who found Justin Bieber.
Speaker 5 (19:13):
And she was not happy about it.
Speaker 4 (19:16):
This story, and you just hinted at Lucas, it contains
multitudes because in addition to having this kind of like
history of the music business now it's changing, there's also
the relationship between artists and their fans and the rise
of these big fan communities.
Speaker 5 (19:31):
Loucas, you don't.
Speaker 4 (19:32):
Need to give us the whole story, but like, why
did artists not own their songs before and why do
they own them today?
Speaker 1 (19:39):
Well, if you think about it, not just in music,
but in most types of art, the creative person is
not the person who puts up the money to make it.
Speaker 5 (19:49):
Right.
Speaker 1 (19:49):
If you think about the movie business, directors for the
most part do not own their work because they require
someone else to put up the capitol to make this
big movie. The same has been true in the music business,
where you have these labels who have generally put up
the capital to make the art, and also have the
infrastructure around it to help distribute and market and all
these other things. But that has started to change in
(20:14):
part because of when labels sign people. Right, it can
be much easier to both produce and distribute your work
now because of different digital tools that have come about,
and so you will often have label sign people after
they've had a song go viral on YouTube or TikTok
or Instagram, and thus they have a little bit more
(20:35):
leverage in those conversations. There are also a lot of
other companies that are around offering artists the chance to
distribute their work without demanding ownership. There are a lot
of companies that say, we'll distribute for a fifteen percent
fee and you own the masters, and we will try
to make money off of that little phebe get. And
so there are a lot of artists now who can
choose to either go independent or because they have that option,
(20:58):
if they matter enough, we'll tell the lab I want
to own. Now to the question about why, I mean,
it's pretty simple, right, you put your heart and soul
into a piece of art, and you feel like you
should or want to own it. It's also incredibly valuable.
We've seen these catalogs trade for millions, tens of millions,
hundreds of millions of dollars.
Speaker 2 (21:16):
I'm just wondering, like, on a practical level, for an
artist that doesn't need the money, like Taylor Swift, are
there any limitations on her if she doesn't own her songs,
like can she not perform them? Or I'm just wondering
if there's like a practical reason or if it's more
of an emotional thing wanting to own your back catalog.
Speaker 1 (21:32):
There's some slight limitations. A lot of the limitations have
to do actually with the publishing the songwriting, because Taylor
Swift writes almost all of her songs, but there are historically,
much as a record label owned the master recording, there
has been a music publisher that owns the underlying publishing rights,
and you generally can't do public performances without that publishing
(21:54):
right now, if you're the artist, unless this situation is
particularly acrimonious, your publisher is not going to prevent you
from doing the things that you want to do. So
I don't think it's in her case so much that
there are things that she couldn't do, although she has
tried to frame it that way in certain circumstances. More so,
I think it's just she wants to be able to
own it and do what you want. And her whole
messaging throughout the last few years of this process, and frankly,
(22:16):
even before then, she has positioned herself as the sort
of emblem or totem of artist empowerment. Now I think
some of that, frankly has been disingenuous because a lot
of it has just been about what she wants. She
has not sort of in some of these cases, like
won some larger war for the industry, but that is
how she's portrayed it.
Speaker 2 (22:34):
I have to say, like I was not that much
of a Taylor Swift fan up until this moment.
Speaker 1 (22:40):
You and a lot of other people, because she became
way more popular during this process.
Speaker 2 (22:44):
I was just like, she's taking on the man, and
I loved that she fought back and then she kind
of won. She re recorded all these songs. Those songs
did great. I just thought it was such a cool
thing that she took on the industry and.
Speaker 5 (22:59):
Won.
Speaker 2 (23:00):
It also sort of positioned her as being this amazing
business person, or at least that's how it seemed.
Speaker 1 (23:06):
I think I see the different transactions a little bit differently,
just in so far as I see, I think that
everyone did what you would expect them to do, which
was the act that in their own self interest. So
Scott Borshetta got the best deal he could get for
his label, Scooter Braun made a very savvy deal for that,
and then resold it and made a bunch of money
from that.
Speaker 2 (23:26):
He resold it to private equity, right.
Speaker 1 (23:28):
Correct, He sold it to Shamrock. And then Taylor swifted
what was in her interest, which is that she turned
this into the single grades marketing campaign the music business
has ever seen. So even though I think Taylor is
very adept at manipulating story and narrative, and because people
like her and they are any of her exits and
inclined to not like these other people, she gets them
(23:50):
to view things in ways that are like not quite right,
Like there's this whole thing where she like claimed Scooter
Braun was trying to block her from performing her music
at the American Music Awards that struck is like total
bogus because he doesn't really have the right to do that.
That was part of her campaign. But even though I
think some of what she has done has been misleading,
it has only amplified my respect for her as a
(24:13):
business person because I just think she's incredibly savvy and
has been the most impressive not just artists, but one
could argue executive in the music business over the last
several years.
Speaker 2 (24:24):
What move did she make that hadn't been made before
that that impressed you.
Speaker 1 (24:29):
Well, she weaponized her fanshies. Yeah, when she initially talked
about re recording her albums, if you talk to most
people in the music business, they didn't think this was
going to be a big deal. People had re recorded
albums in the past. But she was able to generate
interest in those re records, and she marshaled this rabid
(24:50):
fan base in a way that I've really only seen
in recent history with some of these Korean acts. But
it feels like hers is so much bigger. Maybe be
Tess was almost as big, But like the people who
just really cared about Taylor Swift and followed everything she
did and we're going to listen to everything and argue
about all the different versions she she weaponized her fans
(25:12):
in a way that gave her all this power and
that really neutralized any of her rivals or enemies.
Speaker 2 (25:18):
So Taylor Swift's Airas tour that you mentioned made I
think a billion dollars.
Speaker 5 (25:23):
I think it was like the movie Most I think
it got to two billion, got to.
Speaker 2 (25:26):
Two billion dollars. And also like everywhere she went, she
was like moving the economic needle, like helping small businesses GDPs.
All of it was that directly related to this drama.
Speaker 1 (25:39):
Do you think sort of Well, because she re recorded
and then re released all of this early music, it
had people listening to it, and it set herself up
to do something that is pretty rare for an artist
who at the time was like thirty two thirty three.
She essentially went on the Greatest Hits tour.
Speaker 2 (25:59):
Yeah, that's true.
Speaker 1 (26:00):
Each album sort of became a quote unquote era, or
a couple of albums became an era.
Speaker 5 (26:05):
Because she's so prolific.
Speaker 1 (26:07):
She's put out so much new music, and she continued
while rerecording to also record new music. I mean, the
amount of record she's released over of the last four
or five years is really mind boggling. And so I
think it did prime everyone. Her fandom was peaking. She
had had people listening to the old and to some
new music, and it just set up this tour that's
unlike anything the world has ever seen. I mean, it's
(26:28):
the best selling tour in the history of the music business.
Speaker 5 (26:30):
By all A lot. Who won?
Speaker 2 (26:32):
Yeah, who won the breakup?
Speaker 1 (26:34):
So my take on this is that everyone won. She's
the biggest winner, but everyone won. Scott Borschetta got paid
three hundred million dollars for Big Machine, who was already
doing fine, but he now has generational wealth. Scooter Braun
resold just the Taylor albums for three hundred and sixty
million dollars and then used Big Machine and the rest
(26:54):
of his business to sell to the Korean company High
which is the home of BTS, for about a billion dollars.
Speaker 5 (26:59):
So he got stupidly wealthy. Universal Music Group.
Speaker 1 (27:02):
The biggest music company in the world, signs Taylor Swift
away from Big Machine and looks like this very artist
friendly place, even though keep in mind they are the
largest owner of master recordings in the world and Shamrock.
You know, I don't know that they made a killing
on this, but at a minimum, with the way that's resolved,
Taylor Swift tails them, and they're going to go out
and buy catalogs and they can say Taylor things for
(27:23):
great why don't you the only loss in this? There's
a little bit of loss of people's perception of reality.
And then I do think that that from a perception standpoint,
like Scooter Brawn definitely suffered, right, He became the villain
on the internet, and I think there have been some
personal results from this for him and his family that
(27:43):
have been pretty negative. I think there's been a lot
of nastiness directed at them. But if we're just speaking
sort of financially in business speaking, everybody one.
Speaker 3 (27:52):
We got bad.
Speaker 2 (27:54):
You know what he used to be bad.
Speaker 3 (27:57):
So take a look what you do because maybe.
Speaker 6 (28:00):
Know we got there.
Speaker 2 (28:02):
But so we are now to the last part of
our show where we talk about our underrated story of
the week. Max, you found our underrated story?
Speaker 3 (28:13):
What do you got?
Speaker 5 (28:14):
Okay?
Speaker 4 (28:14):
Now, I don't want to just be the generational clash
reporter here, but I've got a sort of finger waggy
story about bar tabs Stacy.
Speaker 3 (28:24):
Okay.
Speaker 4 (28:24):
Basically, according to the New York Times, gen Z, when
they go to the bar, they don't open a tab
and just like leave it open until they leave. They
buy a drink, pay for it, close the tab, tip
the bartender sign the receipt and then hang around for
a little while, order another drink, open a tab, immediately
(28:45):
close it, sign the receipt, pay the tip, and they
do that over and over again.
Speaker 2 (28:48):
That is the correct way to do that.
Speaker 3 (28:51):
It's well listen. The New York Times is not agreed.
Speaker 4 (28:53):
There are lots of people quoted in this story who
are horrified.
Speaker 3 (28:58):
Bartenders don't like it.
Speaker 4 (28:59):
For one thing, because you know, if you're working at
a bar at a very busy time, this is like
slowing you down. This is like a drink that you
could be pouring, especially if it's busy. It means that
other people have to wait longer. And I think what
I detected in this time story is also sort of
a complaint about something being overly transactional. There's a quote
(29:20):
from a bartender that said, these kids never learned the
proper way to be a barfly.
Speaker 3 (29:25):
Now, what was funny about this bad.
Speaker 2 (29:29):
What feels like a feature, not a bug.
Speaker 4 (29:32):
What's funny about this story to me is that the
Times posited all of these theories for what could.
Speaker 6 (29:38):
Be going on.
Speaker 2 (29:38):
Oh okay, yeah, yeah, you want to hear a few once.
Speaker 4 (29:40):
I do, all right, So one, and we've talked about
this on the show. Gen Z drinks less. This is
a great way to avoid over consuming.
Speaker 3 (29:49):
Yeah, because you drink.
Speaker 2 (29:50):
If it tabs open, you might as well.
Speaker 4 (29:52):
So that's why I feel like that makes maybe the
most sense. Okay, Number two commitment issues. Gen Z has
trouble ay a bar tab me commit somebody quoted in
the New York Times.
Speaker 3 (30:04):
Basically, it's like an echo of our tender thing. They're
just like not ready to like commit to open up bar.
Speaker 4 (30:11):
To be fair, I think it's sort of like not
wanting to have to, like want to leave and fight
your way.
Speaker 3 (30:18):
Okay, here's another theory gen Z.
Speaker 4 (30:22):
Gen Z is more financially literate thanks to the quote
accessibility of online financial literacy tools. Last one, Yeah, this
is another pet scratcher for me. Gen Z is more introverted.
They just don't want to have to, like have that
additional social interaction with the bartender. There is one obvious
(30:45):
thing that's going on, which is also to be fair
mention this story, which is that not just gen Z,
but everybody in general does not use cash as much,
and younger people especially never use cash.
Speaker 3 (30:55):
Well, yeah, I.
Speaker 2 (30:56):
Think that's true. Like the way that you pay for
things is different. I actually don't use cards anymore. I
pay for stuff with my phone most of the time,
and so then you'd have to close out every time
you can't leave your phone open.
Speaker 4 (31:06):
I do think like most of these things that The
Times is talking about, like not wanting to deal with
the bartender, were not wanting to spend too much money.
Like if you're paying with cash, it's very easy to
do all these things. You just bring forty bucks with
you to the bar, and like when you're forty dollars
is done, you leave the bar.
Speaker 3 (31:22):
Ye.
Speaker 4 (31:22):
Yeah, And that's like what I did when I was,
you know, in my twenties. So I think this is
just like more story about payment methods than it is
about any cultural norms.
Speaker 5 (31:33):
Well.
Speaker 2 (31:34):
Also, like all of the theories seem to just paint
gen Z in a really good light, like they're responsible listeners.
Speaker 3 (31:42):
How do you pay your bar tab?
Speaker 4 (31:44):
Let us know everybody's at Bloomberg dot net and let
us know what you're watching in the tax bill or
what's happening in Washington, what stories we should be talking
about next week. This show is produced by State Mangus
Hendrickson is our supervising producer, Amy keen Our editor and
Brendan Francis. Neonham is our executive producer. Dave Purcell handles
(32:08):
fact checking, and Blake Maples is our engineer. Special thanks
to Angel Roscio, Jennifer Mass and Jeff Muscus Sage Bauman
heads Bloomberg Podcasts. If you have a minute, please rate
and review our show.
Speaker 3 (32:18):
It means a lot to.
Speaker 2 (32:19):
Us, and if you do, Max will send you a
personalized haiku on the economic and business topic of your choice.
We need to offer this as an economic show. We
have to offer people an economic incentive.
Speaker 3 (32:30):
Farm I send it everybody.
Speaker 2 (32:32):
I agree, really, I agree to this hiku.
Speaker 4 (32:34):
If you have a story that should be our business,
email us at Everybody's at Bloomberg dot net.
Speaker 3 (32:38):
We will read it and we will respond. Thanks for listening.
Speaker 4 (32:41):
We will see you next week.
Bloomberg Audio Studios, Podcasts, radio news.
Speaker 2 (00:10):
This is Everybody's Business from Bloomberg BusinessWeek. I'm Stacey Mannix Smith.
I'm Max Chafkin, and this week Max all about eras.
Speaker 3 (00:17):
Yes, Stacey, the Eulon era is ending in Washington, DC.
Speaker 4 (00:21):
We're going to talk about the deficit era. These gigantic deficits.
Speaker 2 (00:25):
Not ending in Washington, DC.
Speaker 4 (00:27):
And my personal favorite era, the era of Taylor Swift owning.
Speaker 2 (00:32):
Your own music, Yes, Taylor's version.
Speaker 3 (00:37):
How are you, Stacey?
Speaker 2 (00:38):
I'm doing pretty well.
Speaker 5 (00:39):
How are you? So?
Speaker 4 (00:41):
There's been all this talk about kind of macroeconomics right now.
Oh yeah, there's the deficit, there's the bond market, the dollar,
and it's kind of left me a bit at a
loss to figure out what to say beyond there's so
much volatility right now.
Speaker 5 (00:56):
Yeah.
Speaker 2 (00:57):
The Trump administration has been making all these big moves,
which is making up big global macroeconomic markets. It's got
people behaving in all kinds of really interesting ways. One
of the ones that I've been tracking, and you know this,
I love watching the price of gold.
Speaker 4 (01:13):
Stacy is like she's got her bars in her bunker.
Speaker 3 (01:17):
She's ready to end the fence.
Speaker 4 (01:19):
I go back exactly, the resident goldbug on everybody's business.
Speaker 2 (01:23):
Well, what I think so fascinating about gold is it's
one of those investments that is a little fringy, but
it is something people gravitate to when there's a lot
of uncertainty.
Speaker 4 (01:33):
I mean, it is fringing in a way because like
most people would not have it be like a major
part of their portfolio unless you're watching like late night infomercials.
But in a other way, it's not fringing at all.
It's kind of like the original investable asset.
Speaker 2 (01:48):
No, that's very true. And the price of gold right
now is at a record high thirty five hundred dollars
an ounce almost, which is just kind of insane, but
does speak to this moment that we're in. And I
actually wanted to sort of talk to people who maybe
weren't in finance and investing about what their impression of
gold was right now. So there is a museum exhibit
(02:10):
at the Brooklyn Museum called Solid Gold, which tracks gold
through the ages and our culture's relationship with gold, and
so I ask people coming out of that exhibit, like
what they thought of gold and what their impression of
gold was right now.
Speaker 6 (02:23):
Gold to me, it represents technique skill. It really is
a timeless metal.
Speaker 3 (02:30):
So royalty, you know, that's the fine of it.
Speaker 2 (02:33):
Do you guys like invest in gold or own gold stuff? No?
Speaker 3 (02:38):
Gold is not my color. So normally.
Speaker 7 (02:41):
I do own a bit of gold, but that's mainly
because of like parental pressure and from India. So gold
is seen, it is like staple. It's never going to
go down in value.
Speaker 4 (02:53):
I think gold is a pretty safe back because for
some reason it's always relevant.
Speaker 5 (02:57):
Do you own gold?
Speaker 2 (02:58):
Do you invest in gold?
Speaker 5 (03:00):
No? I don't, Now it's so expensive.
Speaker 4 (03:02):
I'm a musician, so I'll work and I won't work,
but it's not a steady job.
Speaker 2 (03:06):
Do you have any gold records?
Speaker 5 (03:08):
No?
Speaker 6 (03:08):
If I did, the whole different story.
Speaker 2 (03:10):
What do you think is like a safe place to
put your.
Speaker 6 (03:12):
Money as far as investment, life experiences? Coming to the
Brooklyn Museum.
Speaker 2 (03:17):
That's the kind of gold that you can't buy that, I.
Speaker 3 (03:22):
Mean, great answer, I know. Can you just explain why
people are buying gold?
Speaker 4 (03:27):
Because the thing is most people their investments, whether it's
real estate or stocks or life experience, those are also
hedged against the price of the dollar.
Speaker 2 (03:36):
That's a good point.
Speaker 4 (03:37):
So why would you want to buy this like volatile
asset that's hard to sell and that's kind of heavy.
Speaker 2 (03:43):
Well, you're right in the short term that it's valible,
but over time, gold is probably the one of the
oldest stores of value. So people like it, royalty people
like it. But I think at times when there's a
lot of confusion over the value of stuff, so like
stocks are doing well, but they've been way up and
way down the dollar. People are worried about because of
(04:05):
all the potential inflation because of tariffs. There's been so
much uncertainty in the Trump presidency with tariff policy, with
global relationships that I think people are just nervous. And
gold is like a little safe haven. It's like this
little bunker of value.
Speaker 4 (04:22):
I think that the Life Experience guy is right, the
point of the Brooklyn Museum is where the real gold is.
Speaker 3 (04:28):
I feel like I might need to see this exhibit.
Speaker 4 (04:34):
All right, Stacy, let's talk about the one big, beautiful bill,
one thousand plus pages.
Speaker 3 (04:40):
Great name. Yeah, this bill.
Speaker 4 (04:44):
Top line thing extending the twenty seventeen Trump tax cuts,
which we're supposed to expire. But then you have a
bunch of other things. You have new tax cuts, You
have cuts to Medicaid and food stamp programs to pay
for the tax cuts. You have no tax on tips.
You have some random trolley stock that's just sort of
thrown in there, tax cut for gun silencers, preventing medicaid
(05:04):
dollars from going to planned parenthood. Then you have some
kind of random Trump priorities that seem to have nothing
to do with taxes, Golden Dome, funding for deportations, taxing
college endowments, drilling on public lands, no more evy tax credits.
It goes on and on. Like I said, a thousand pages,
I wanted to talk about this that's a beefy bill
(05:25):
because it's really it's a tax bill. But like you've
been doing a lot of reporting on taxes and the
way I guess people feel about them, what they mean
for our budgets, our personal budgets as well as our
government budgets, and I kind of just wanted to get
your take about what is in this bill first of all,
and like why it matters.
Speaker 2 (05:45):
Well, first of all, it's kind of fascinating to hear
you run through all the litany of stuff in the bill,
because it is formidable. I would say the crux of
it is that this bill does extend the twenty seventeen
tax cuts. But the major concern here is how expensive
it's going to be. It's going to add a lot
to the deficit.
Speaker 4 (06:03):
Hold that thought because one thing I thought we could do.
It seems like everyone's mad at this bill. So Elon
Musk he's been going through it, and there was a
press conference last week on Friday, during which Musk left
the White House. Trump thanked him, said we're gonna stay
super close. It was all very amicable, I guess, except
(06:25):
for the black eye that Elon had for some reason.
But anyway, in the days that have followed, and we're
recording on Thursday, June fifth, things have gotten very acrimonious.
Speaker 3 (06:35):
Musk has been.
Speaker 4 (06:36):
Attacking the big beautiful bill. He's been essentially saying it's
full of pork. Trump went off on the Oval Office
accusing Elon Musk of having Trump derangement syndrome, which is
very funny, and then Musk on Twitter essentially keeping the
fight going, saying that Trump wouldn't have got elected without him.
So that is going on, and Musk is not the
(06:57):
only person who's mad about this. Publicans are mad Democrats
are mad. I thought like one exercise would be to
kind of go through what they're mad about. And I
think the first one, of course, is the deficit. Do
you know, off the top of your head of how
much the deficit bill is going to be if this thing.
Speaker 2 (07:13):
HAPs to yeah, over the next ten years. This is
always how they calculate these things. The tax bill will
add and estimated four plus trillion dollars to the deficit,
which is huge.
Speaker 4 (07:23):
Yes, that's like the CBO estimate for the tax part
of the bill. The estimates sort of range from, like
you said, four trillion maybe down to two trillion or so.
But the thing is, there are all these temporary tax
cuts in this bill, like the no tax on tips,
and if those become permanent, then it's up to five trillion.
So it could actually be greater than even the estimates
(07:44):
are saying. And Elon Musk has been on a heater
about this. As I said, we've also seen a bunch
of Republicans, ran Paul Thomas Massey, a lot of Wall
Street folks.
Speaker 3 (07:53):
They're all talking about deficits in sort of very dire terms.
Speaker 2 (07:57):
Yeah, well, it's all the kind of old school republics
who are sort of fiscally conservative, small government. This bill
is definitely the opposite of that. But it is a
tricky situation in fairness, I think because the tax cuts,
if they expire, we will experience them. Most people did
get a tax cut, I mean it's not quite evenly distributed.
(08:18):
So middle class households that's people making roughly between seventy
five thousand and two hundred thousand dollars got on average
at tax cut of about one thousand dollars in twenty seventeen.
And really wealthy people got a tax cut of on
average like seventy thousand dollars. But you know, percentage wise,
it was sort of on track. And if you let
(08:39):
them expire, most people experience this as a tax hike. Yes,
and for middle and low income families, like a thousand
extra dollars is a big deal, so it's tough.
Speaker 3 (08:47):
And if you're rich, seventy thousand dollars also. They hold
that thought though, because.
Speaker 4 (08:51):
I want to go through the other two main areas
of madness. Okay, so the other one is the actual cuts. Right,
Although this is a bill that increase the deficit, they
are making some effort to cut things back and The
main way they're doing this is Medicaid, that is the
health program that the United States has for poor people.
And what is happening is the bill would make it
(09:13):
so that there are work requirements for Medicaid, so that
people would have to prove that they are working a
certain number of hours each month.
Speaker 3 (09:21):
The challenge here.
Speaker 4 (09:22):
Right, is like, how do you prove it is everyone
able to do the requisite paperwork? And there are independent
estimates showing that something like eleven million people will lose
their health insurance if that happens. Now, that has a
bunch of Democrats mad. You could understand that Democrats, of
course have been historically the party of expanding health insurance
(09:44):
with public programs, but many red state Republicans are also
mad about this. Josh Holly, very conservative senator from Missouri,
called the idea of cutting Medicaid morally wrong and politically suicidal.
Speaker 2 (09:57):
Yeah, I mean, healthcare is already such a huge shot
button issue in this country, and Medicaid in fairness is
one of the bigger expenses in our budget. But even
those cuts are not going to make up for how
much the bill costs.
Speaker 4 (10:10):
And then the last one, Now this is more conventional
they're cutting some very specific programs, including these green energy programs,
which Trump kind of ran against and hates, but a
bunch of Republicans are mad about because their states have
benefited from some of these programs.
Speaker 2 (10:28):
Elon Musk himself has benefited from a lot ils us.
Speaker 4 (10:31):
While he has on one hand sort of wringing his
hands about the deficit, his companies and even he at
times has been sort of complaining that they're losing these
tax credits. So he's like talking about quote unquote pork,
but like he just he wants his pork.
Speaker 2 (10:47):
Yes, Well, I feel like, honestly, that is the problem
that we're running up against with the deficit right now
and taxes is that there is no party. I do
not think the Democrats or the Republicans are in in
the situation that actually wants to bring the deficit our
debt under control. Everybody just wants to spend that money
(11:07):
in a different way. Even the Democratic proposal, which would
keep in place the tax expiration basically, I think the
top five percent would see their tax cuts expire, Like
forty five percent of the cost of the tax bill
would go away if you just let the tax cuts expire.
For like the top five percent of earners. But then
(11:30):
the Democratic Party wants to also spend it. Nobody wants
to deal with the deficit. That is like the only
thing uniting the parties right now.
Speaker 4 (11:37):
And it's not just that, it's like no one can
even admit that these tax.
Speaker 3 (11:42):
Cuts are part of the deficit.
Speaker 4 (11:44):
You know, over the last couple of days, Mosk and
his friends and so on are are getting mad. And
the thing that they're fixating on, I know this is
gonna send you over the ledge. They're fixating on this
part of the debt limit because it raises.
Speaker 3 (11:57):
The debt ceiling, the debt ceiling to five trill.
Speaker 4 (12:00):
They're saying, well, we need to pass the tax cuts,
but we can't raise the debt ceiling this high.
Speaker 3 (12:05):
And as you know, that's just oh in cohero.
Speaker 2 (12:07):
That is a constant, huge fight, one that has caused
the credit rating in our country to go down because
there's such a risk of the US defaulting on its debt.
Why would you tie that perennial battle in with something
this big. It does not seem like all right.
Speaker 4 (12:24):
Now now, this is probably where I should say that
the administration has kind of responded. Russell vote who's the
head of OMB, the Office of Management and Budget. He's
an administration figure in a way, an ideological ally of Musk.
He went on TV and he tried to make the
case that these estimates are just wrong because they are
(12:45):
calculating things using this false, you know, ideological math.
Speaker 8 (12:49):
When you assume the extension of the president's tax relief
from twenty seventeen, this budget or this bill, and it's
really a reconciliation bill. It's not really a budget bill.
It is using a budget process. This is a one
point four trillion dollar over ten years deficit reduction.
Speaker 2 (13:08):
Well, that's like me saying, if I don't count my
Giant Chase credit card bill, it's just all profit.
Speaker 4 (13:15):
One thing I've wondered about Stacy's like, if these deficit
hawks are right, when do normal people start to notice?
Speaker 3 (13:22):
How bad? Can you make the case that this is
actually bad?
Speaker 2 (13:26):
I love this question because our country is in like
thirty trillion dollars worth of debt right now, and it's like,
you can't even imagine that amount of money, And it's like, well,
I don't know. I just want to live my life
and pay my rent. It's what does that mean? So
I think the real issue here is how expensive it's
getting to service the debt. Like the interest we're paying
on the debt right now, that's the size of the
(13:47):
defense budget. But apparently within a decade, one third of
all the taxes we pay are going to go to
servicing the debt, which means that's money that can't go
to growing our economy or fling potholes or expanding healthcare
programs or whatever you'd want to do with that money.
It just it's becomes so unproductive. It would be like
(14:07):
all of my incomes going to paying my credit card bills.
I can't make investments, I can't grow. It starts to
really shrink our economy and really cripple the government.
Speaker 4 (14:16):
So the issue is that the government loses the ability
to do things and then our lives to grade or.
Speaker 2 (14:21):
The economy starts to shrink because it starts to sort
of basically become our economy. Servicing the debt becomes our economy.
Speaker 4 (14:29):
All right, So let's talk about what do you think
is going to happen here, or what we think is
going to happen.
Speaker 3 (14:33):
Trump wants this done by July fourth. We're seeing not
necessarily great size that that is going to happen. But
I think everyone sort of.
Speaker 4 (14:41):
Assumes that these tax cuts at least have to be
extended for the reasons that you mentioned, because yeah, everyone
will be too mad. Jamie Diamond went on Fox Business
and he was sort of talking about like how bad
the these deficits are and the bond market and this
and that, and then he basically says, yeah, but we
just need the tax cuts to be extended because we
need that for the economy, and we'll deal with the
(15:02):
deficits after we get that done.
Speaker 2 (15:04):
I think this is the real issue. No one is
dealing with the deficits. I talked with this economist, Jessica
Riedal from the Manhattan Institute, which is a pretty right
of center think tank, and she says she's been talking
to politicians on both sides of the aisle and that
the one thing everybody agrees on is that they don't
want to deal with this. Here's what she told me.
Speaker 9 (15:24):
I brief members of Congress very regularly, and I walk
them through the budget slides and the data that our
fiscal outlook is unsustainable and we are heading towards a
debt crisis that's going to be terrible for the economy,
and the response I usually get is I understand and
(15:45):
I agree with everything you have said, but I will
lose my seat if I don't keep voting for the
gravy train.
Speaker 2 (15:53):
Spending money is more fun than not spending money. Spending
money greater than not spending money. Always so, Max, one
of the biggest business titans in the country is having
a very cool summer. I know you know what I'm
(16:13):
talking about because you know it. He's shocking amount about
Taylor Swift.
Speaker 3 (16:16):
That was cruel summer. Was that what we were doing?
Speaker 5 (16:17):
Yeah?
Speaker 2 (16:18):
I was doing a cruel summer, mister Egg.
Speaker 4 (16:20):
Yeah, this is huge because if you have been following
Taylor Swift for the last I don't know five years,
this battle over her music rights has been kind of
the defining artistic thing, even more so than the relationship
with Travis Kelcey, the breakup with that guy from England
whose name I don't remember, Ate Jillen Halgate, this question
(16:42):
of the scarf, it's all kind of subservient to this
business question.
Speaker 3 (16:47):
It's an ideal topic for us on this podcast.
Speaker 2 (16:50):
It is, and here to walk us through this whole
torture tale is Lucas Shaw. He covers Hollywood and entertainment
for Bloomberg. He writes the excellent newsletter screen Time.
Speaker 5 (16:57):
Hey Lucas, thanks for having me.
Speaker 3 (17:00):
So Taylor Swift just.
Speaker 2 (17:01):
Scored this kind of major business victory, and the winners
and losers here were pretty surprising. Taylor has just acquired
the rights to her first six albums from this private
equity group called Shamrock Capital, and that essentially means she
controls all of her music and music videos and unreleased
works from those albums. So take us back to the
beginning here. Where did this bad blood start?
Speaker 5 (17:22):
Oh?
Speaker 1 (17:22):
Boy, Well, you could argue that it started the moment
she signed her initial deal, which was back and I
want to say like six or something, just because the
way the music industry works, she signed a deal that
gave Big Machine, her initial record label, the rights to
her first six albums. But in the case of this dispute,
it really started when Scott Borschetta, who owned Big Machine,
(17:44):
decided that it was time to sell because Taylor Swift
was leaving. So Taylor Swift finishes those first six albums.
Speaker 5 (17:52):
She was one of the.
Speaker 1 (17:52):
Most successful pop stars in the world nineteen eighty nine,
which I believe was the fourth of those six, but
don't hold me to it.
Speaker 5 (18:00):
Been one of them.
Speaker 2 (18:00):
Oh that's the big one with like Shake It Off.
Speaker 1 (18:02):
And one of the best selling albums in modern history.
And Taylor Swift, having completed that contract, decided that she
wanted to own her future work because the way the
music business was structured had changed. Historically. You know, labels
had really owned and controlled everything, but because of a
lot of changes related to the Internet, in large part,
(18:24):
it has become much easier for artists to demand ownership,
and she was going to get that in her next deal.
She also wanted her previous albums, and so there's a
lot of sort of disagreement I think about what exactly happened,
But what it boils down to is Taylor Swift might
have resigned a big machine had she been able to
get her first six albums back. Scott Borchetta placed some
(18:44):
limits on that, like her earning it out by signing
new things. Instead, she goes to Universal Music Group, the
biggest music company in the world. They say that she
will own all of her future work and they just
license it back from her for a period of time.
And then Scott Borshetta looks at this and says, Okay,
Big Machine is added to most valuable that's ever going
to be because Taylor was her biggest star. I need
(19:05):
to sell this. He sells Big Machine to a music
mogul manager named Scooter Braun, best known as the guy
who found Justin Bieber.
Speaker 5 (19:13):
And she was not happy about it.
Speaker 4 (19:16):
This story, and you just hinted at Lucas, it contains
multitudes because in addition to having this kind of like
history of the music business now it's changing, there's also
the relationship between artists and their fans and the rise
of these big fan communities.
Speaker 5 (19:31):
Loucas, you don't.
Speaker 4 (19:32):
Need to give us the whole story, but like, why
did artists not own their songs before and why do
they own them today?
Speaker 1 (19:39):
Well, if you think about it, not just in music,
but in most types of art, the creative person is
not the person who puts up the money to make it.
Speaker 5 (19:49):
Right.
Speaker 1 (19:49):
If you think about the movie business, directors for the
most part do not own their work because they require
someone else to put up the capitol to make this
big movie. The same has been true in the music business,
where you have these labels who have generally put up
the capital to make the art, and also have the
infrastructure around it to help distribute and market and all
these other things. But that has started to change in
(20:14):
part because of when labels sign people. Right, it can
be much easier to both produce and distribute your work
now because of different digital tools that have come about,
and so you will often have label sign people after
they've had a song go viral on YouTube or TikTok
or Instagram, and thus they have a little bit more
(20:35):
leverage in those conversations. There are also a lot of
other companies that are around offering artists the chance to
distribute their work without demanding ownership. There are a lot
of companies that say, we'll distribute for a fifteen percent
fee and you own the masters, and we will try
to make money off of that little phebe get. And
so there are a lot of artists now who can
choose to either go independent or because they have that option,
(20:58):
if they matter enough, we'll tell the lab I want
to own. Now to the question about why, I mean,
it's pretty simple, right, you put your heart and soul
into a piece of art, and you feel like you
should or want to own it. It's also incredibly valuable.
We've seen these catalogs trade for millions, tens of millions,
hundreds of millions of dollars.
Speaker 2 (21:16):
I'm just wondering, like, on a practical level, for an
artist that doesn't need the money, like Taylor Swift, are
there any limitations on her if she doesn't own her songs,
like can she not perform them? Or I'm just wondering
if there's like a practical reason or if it's more
of an emotional thing wanting to own your back catalog.
Speaker 1 (21:32):
There's some slight limitations. A lot of the limitations have
to do actually with the publishing the songwriting, because Taylor
Swift writes almost all of her songs, but there are historically,
much as a record label owned the master recording, there
has been a music publisher that owns the underlying publishing rights,
and you generally can't do public performances without that publishing
(21:54):
right now, if you're the artist, unless this situation is
particularly acrimonious, your publisher is not going to prevent you
from doing the things that you want to do. So
I don't think it's in her case so much that
there are things that she couldn't do, although she has
tried to frame it that way in certain circumstances. More so,
I think it's just she wants to be able to
own it and do what you want. And her whole
messaging throughout the last few years of this process, and frankly,
(22:16):
even before then, she has positioned herself as the sort
of emblem or totem of artist empowerment. Now I think
some of that, frankly has been disingenuous because a lot
of it has just been about what she wants. She
has not sort of in some of these cases, like
won some larger war for the industry, but that is
how she's portrayed it.
Speaker 2 (22:34):
I have to say, like I was not that much
of a Taylor Swift fan up until this moment.
Speaker 1 (22:40):
You and a lot of other people, because she became
way more popular during this process.
Speaker 2 (22:44):
I was just like, she's taking on the man, and
I loved that she fought back and then she kind
of won. She re recorded all these songs. Those songs
did great. I just thought it was such a cool
thing that she took on the industry and.
Speaker 5 (22:59):
Won.
Speaker 2 (23:00):
It also sort of positioned her as being this amazing
business person, or at least that's how it seemed.
Speaker 1 (23:06):
I think I see the different transactions a little bit differently,
just in so far as I see, I think that
everyone did what you would expect them to do, which
was the act that in their own self interest. So
Scott Borshetta got the best deal he could get for
his label, Scooter Braun made a very savvy deal for that,
and then resold it and made a bunch of money
from that.
Speaker 2 (23:26):
He resold it to private equity, right.
Speaker 1 (23:28):
Correct, He sold it to Shamrock. And then Taylor swifted
what was in her interest, which is that she turned
this into the single grades marketing campaign the music business
has ever seen. So even though I think Taylor is
very adept at manipulating story and narrative, and because people
like her and they are any of her exits and
inclined to not like these other people, she gets them
(23:50):
to view things in ways that are like not quite right,
Like there's this whole thing where she like claimed Scooter
Braun was trying to block her from performing her music
at the American Music Awards that struck is like total
bogus because he doesn't really have the right to do that.
That was part of her campaign. But even though I
think some of what she has done has been misleading,
it has only amplified my respect for her as a
(24:13):
business person because I just think she's incredibly savvy and
has been the most impressive not just artists, but one
could argue executive in the music business over the last
several years.
Speaker 2 (24:24):
What move did she make that hadn't been made before
that that impressed you.
Speaker 1 (24:29):
Well, she weaponized her fanshies. Yeah, when she initially talked
about re recording her albums, if you talk to most
people in the music business, they didn't think this was
going to be a big deal. People had re recorded
albums in the past. But she was able to generate
interest in those re records, and she marshaled this rabid
(24:50):
fan base in a way that I've really only seen
in recent history with some of these Korean acts. But
it feels like hers is so much bigger. Maybe be
Tess was almost as big, But like the people who
just really cared about Taylor Swift and followed everything she
did and we're going to listen to everything and argue
about all the different versions she she weaponized her fans
(25:12):
in a way that gave her all this power and
that really neutralized any of her rivals or enemies.
Speaker 2 (25:18):
So Taylor Swift's Airas tour that you mentioned made I
think a billion dollars.
Speaker 5 (25:23):
I think it was like the movie Most I think
it got to two billion, got to.
Speaker 2 (25:26):
Two billion dollars. And also like everywhere she went, she
was like moving the economic needle, like helping small businesses GDPs.
All of it was that directly related to this drama.
Speaker 1 (25:39):
Do you think sort of Well, because she re recorded
and then re released all of this early music, it
had people listening to it, and it set herself up
to do something that is pretty rare for an artist
who at the time was like thirty two thirty three.
She essentially went on the Greatest Hits tour.
Speaker 2 (25:59):
Yeah, that's true.
Speaker 1 (26:00):
Each album sort of became a quote unquote era, or
a couple of albums became an era.
Speaker 5 (26:05):
Because she's so prolific.
Speaker 1 (26:07):
She's put out so much new music, and she continued
while rerecording to also record new music. I mean, the
amount of record she's released over of the last four
or five years is really mind boggling. And so I
think it did prime everyone. Her fandom was peaking. She
had had people listening to the old and to some
new music, and it just set up this tour that's
unlike anything the world has ever seen. I mean, it's
(26:28):
the best selling tour in the history of the music business.
Speaker 5 (26:30):
By all A lot. Who won?
Speaker 2 (26:32):
Yeah, who won the breakup?
Speaker 1 (26:34):
So my take on this is that everyone won. She's
the biggest winner, but everyone won. Scott Borschetta got paid
three hundred million dollars for Big Machine, who was already
doing fine, but he now has generational wealth. Scooter Braun
resold just the Taylor albums for three hundred and sixty
million dollars and then used Big Machine and the rest
(26:54):
of his business to sell to the Korean company High
which is the home of BTS, for about a billion dollars.
Speaker 5 (26:59):
So he got stupidly wealthy. Universal Music Group.
Speaker 1 (27:02):
The biggest music company in the world, signs Taylor Swift
away from Big Machine and looks like this very artist
friendly place, even though keep in mind they are the
largest owner of master recordings in the world and Shamrock.
You know, I don't know that they made a killing
on this, but at a minimum, with the way that's resolved,
Taylor Swift tails them, and they're going to go out
and buy catalogs and they can say Taylor things for
(27:23):
great why don't you the only loss in this? There's
a little bit of loss of people's perception of reality.
And then I do think that that from a perception standpoint,
like Scooter Brawn definitely suffered, right, He became the villain
on the internet, and I think there have been some
personal results from this for him and his family that
(27:43):
have been pretty negative. I think there's been a lot
of nastiness directed at them. But if we're just speaking
sort of financially in business speaking, everybody one.
Speaker 3 (27:52):
We got bad.
Speaker 2 (27:54):
You know what he used to be bad.
Speaker 3 (27:57):
So take a look what you do because maybe.
Speaker 6 (28:00):
Know we got there.
Speaker 2 (28:02):
But so we are now to the last part of
our show where we talk about our underrated story of
the week. Max, you found our underrated story?
Speaker 3 (28:13):
What do you got?
Speaker 5 (28:14):
Okay?
Speaker 4 (28:14):
Now, I don't want to just be the generational clash
reporter here, but I've got a sort of finger waggy
story about bar tabs Stacy.
Speaker 3 (28:24):
Okay.
Speaker 4 (28:24):
Basically, according to the New York Times, gen Z, when
they go to the bar, they don't open a tab
and just like leave it open until they leave. They
buy a drink, pay for it, close the tab, tip
the bartender sign the receipt and then hang around for
a little while, order another drink, open a tab, immediately
(28:45):
close it, sign the receipt, pay the tip, and they
do that over and over again.
Speaker 2 (28:48):
That is the correct way to do that.
Speaker 3 (28:51):
It's well listen. The New York Times is not agreed.
Speaker 4 (28:53):
There are lots of people quoted in this story who
are horrified.
Speaker 3 (28:58):
Bartenders don't like it.
Speaker 4 (28:59):
For one thing, because you know, if you're working at
a bar at a very busy time, this is like
slowing you down. This is like a drink that you
could be pouring, especially if it's busy. It means that
other people have to wait longer. And I think what
I detected in this time story is also sort of
a complaint about something being overly transactional. There's a quote
(29:20):
from a bartender that said, these kids never learned the
proper way to be a barfly.
Speaker 3 (29:25):
Now, what was funny about this bad.
Speaker 2 (29:29):
What feels like a feature, not a bug.
Speaker 4 (29:32):
What's funny about this story to me is that the
Times posited all of these theories for what could.
Speaker 6 (29:38):
Be going on.
Speaker 2 (29:38):
Oh okay, yeah, yeah, you want to hear a few once.
Speaker 4 (29:40):
I do, all right, So one, and we've talked about
this on the show. Gen Z drinks less. This is
a great way to avoid over consuming.
Speaker 3 (29:49):
Yeah, because you drink.
Speaker 2 (29:50):
If it tabs open, you might as well.
Speaker 4 (29:52):
So that's why I feel like that makes maybe the
most sense. Okay, Number two commitment issues. Gen Z has
trouble ay a bar tab me commit somebody quoted in
the New York Times.
Speaker 3 (30:04):
Basically, it's like an echo of our tender thing. They're
just like not ready to like commit to open up bar.
Speaker 4 (30:11):
To be fair, I think it's sort of like not
wanting to have to, like want to leave and fight
your way.
Speaker 3 (30:18):
Okay, here's another theory gen Z.
Speaker 4 (30:22):
Gen Z is more financially literate thanks to the quote
accessibility of online financial literacy tools. Last one, Yeah, this
is another pet scratcher for me. Gen Z is more introverted.
They just don't want to have to, like have that
additional social interaction with the bartender. There is one obvious
(30:45):
thing that's going on, which is also to be fair
mention this story, which is that not just gen Z,
but everybody in general does not use cash as much,
and younger people especially never use cash.
Speaker 3 (30:55):
Well, yeah, I.
Speaker 2 (30:56):
Think that's true. Like the way that you pay for
things is different. I actually don't use cards anymore. I
pay for stuff with my phone most of the time,
and so then you'd have to close out every time
you can't leave your phone open.
Speaker 4 (31:06):
I do think like most of these things that The
Times is talking about, like not wanting to deal with
the bartender, were not wanting to spend too much money.
Like if you're paying with cash, it's very easy to
do all these things. You just bring forty bucks with
you to the bar, and like when you're forty dollars
is done, you leave the bar.
Speaker 3 (31:22):
Ye.
Speaker 4 (31:22):
Yeah, And that's like what I did when I was,
you know, in my twenties. So I think this is
just like more story about payment methods than it is
about any cultural norms.
Speaker 5 (31:33):
Well.
Speaker 2 (31:34):
Also, like all of the theories seem to just paint
gen Z in a really good light, like they're responsible listeners.
Speaker 3 (31:42):
How do you pay your bar tab?
Speaker 4 (31:44):
Let us know everybody's at Bloomberg dot net and let
us know what you're watching in the tax bill or
what's happening in Washington, what stories we should be talking
about next week. This show is produced by State Mangus
Hendrickson is our supervising producer, Amy keen Our editor and
Brendan Francis. Neonham is our executive producer. Dave Purcell handles
(32:08):
fact checking, and Blake Maples is our engineer. Special thanks
to Angel Roscio, Jennifer Mass and Jeff Muscus Sage Bauman
heads Bloomberg Podcasts. If you have a minute, please rate
and review our show.
Speaker 3 (32:18):
It means a lot to.
Speaker 2 (32:19):
Us, and if you do, Max will send you a
personalized haiku on the economic and business topic of your choice.
We need to offer this as an economic show. We
have to offer people an economic incentive.
Speaker 3 (32:30):
Farm I send it everybody.
Speaker 2 (32:32):
I agree, really, I agree to this hiku.
Speaker 4 (32:34):
If you have a story that should be our business,
email us at Everybody's at Bloomberg dot net.
Speaker 3 (32:38):
We will read it and we will respond. Thanks for listening.
Speaker 4 (32:41):
We will see you next week.
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