Bloomberg Businessweek Weekend - July 11th, 2025 - Bloomberg Businessweek

Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio News.

Speaker 2 (00:08):
This is Bloomberg Business Week Daily reporting from the magazine
that helps global leaders stay ahead with insight on the people, companies,
and trends shaping today's complex economy. Plus global business, finance
and tech news as it happens. The Bloomberg Business Week
Daily Podcast with Carol Masser and Tim Steneveek on Bloomberg Radio.

Speaker 1 (00:31):
Hi, everyone, Welcome to the Bloomberg Business Wee Weekend podcast.
This past week, and Video became the first company to
hit four trillion dollars in market cap, cementing AI's rally
and its status as a kingpin in the global financial market.

Speaker 3 (00:44):
Okay, so that's sort of a micro economic look totally,
even though in Video is such a big company, we
could call it sort of like a macro event.

Speaker 4 (00:51):
True.

Speaker 3 (00:51):
On the macro side, though, there was a lot because
President Donald Trump fired off letters to over a dozen
trading partners threatening new and higher tear rates they will
face if they don't make a trade deal by the
new deadline of August first.

Speaker 1 (01:04):
To be fair, there was stuff happening with trade and
tariffs as we were recording our broadcast and podcasts, so
highly recommend you head to the Bloomberg or Bloomberg dot
com for the latest and greatest when it comes to
trade and tariffs. All right, on trade and tariffs, though,
we talked to the CEO of Treks, it's public company

(01:24):
that's the largest manufacturer of wood alternative decking products, and
the company's CEO joined us to talk about the impact
of President Trump's extended trade deadline.

Speaker 3 (01:33):
Meantime, the world's richest man tells one bullish Tesla analyst
to shut up. That analyst opens up to us in
just a moment.

Speaker 5 (01:42):
All right.

Speaker 1 (01:42):
We also get into some other stuff that's going on.
Amazon's robotic milestone that could one day replace humans and warehouses,
or maybe it's a case they're working side by side.
We get into that, and then I got to say,
in our second hour, we get to America's hot garbage problem,
a bit of a disturbing store.

Speaker 3 (02:00):
Also the CEO of Brooklyn Sports and Entertainment, which owns
the Brooklyn Nets and New York Liberty. All that to come.
We begin with the analyst. You this week got a
short but clear message from Elon Musk. The analyst, Dan Ives,
Global head of Technology research at Webbush securities.

Speaker 6 (02:18):
Look, I mean, I knew Elon was not gonna be happy,
but the reality is, you know, the board they basically
need to now step it up. And I think it's
something where you know, I hear from sheeralders around the
world right on Tesla and as one of the biggest
supporters of Elon and Tesla, it was time to rip

(02:38):
the band aid off. You got to now put a
new structure. And actually one of them you know that
we talked about in terms of the three things that
we suggested, is that justly something Musk wants terms of
twenty five percent voting rights and what I view is
will ultimately be an XAI merger potentially, but second third,
the political gambles and this side show it can't continue.

Speaker 3 (03:04):
You know, analysts were totally seemed totally fine with Elon
Musk and correct me if I'm wrong. They seemed totally
fine with him when he was getting along well with
President Trump and it seemed like the president's policies would
favor his companies. Is that fair to.

Speaker 6 (03:16):
Say it's that's one hundred percent. I mean, I view
it is like and we talked about it. The best
ever happened to Musk at that time was Trump getting
into the White House. And obviously, you know you could
argue Trump doesn't get into the White House if it's
not from Musk.

Speaker 5 (03:32):
But like a lot of things, it took on a
life of its own.

Speaker 6 (03:36):
Doge BFFs spending now time with Tesla, mar Lag or
DC Doge the brand issues That ultimately is why then
Musk had to take a step back and basically leave
the Trump administration. But in your wildest nightmare, no one expected, hey,
let's triple down start a third political party where now

(04:01):
Trump actually becomes a foe, Republican part becomes fue and
that just becomes more of an overhang for Tesla.

Speaker 1 (04:09):
So the board as it exists now, is this the
board that you think can bring about the necessary changes
and set the ground rules as you are calling for Tesla?
And Jack Hartung who has been CFO of Starbucks, not
Starbucks of Chipotle, excuse me, Kimball, Reeve Musk is on it,

(04:31):
Jim Murdoch of course, Elon Robin Denholm, an Australian business
executive from her accountant, chair of the Tesla board. So
I'm just trying to think, is this the board that
you think can execute the changes that need to be done.

Speaker 5 (04:49):
Well, they don't have a choice.

Speaker 1 (04:51):
No, this is I mean they don't have a choice because.

Speaker 6 (04:54):
They don't have a choice where the sometimes boards look,
if you go back to history of Tesla, what Elon does?

Speaker 5 (05:02):
What he do?

Speaker 6 (05:04):
You know, you can never argue a bet against them,
And that's been that's been the m right, that's been
the DNA. The problem is is that essential the clock
strikes midnight when now it comes to these political ventures
and endeavors as well as the time spent at Tesla

(05:27):
the board, you're not going to have a major change
or makeup in a board that would take many years.
The board now, as a public company, needs to a
new pay package. We talked about twenty five percent voting shares,
but then established the guardrails because it's a public company

(05:49):
and shareholders are demanding and the stock reflects changes that
need to be made.

Speaker 3 (05:56):
You know, the board certainly is part of it. But
I think bigger picture question that I have is an
existential one about Tesla Dan and that's with regard to
Chinese competition, and we've seen sales get hammered over the
last year, and that really the narrative has been around
Musks and his association with politics, whether we're talking about
that in the US or about that in Europe. But

(06:18):
what about the China factor? Does Tesla have what it
takes to compete around the world with Chinese EV's, they have.

Speaker 6 (06:26):
What it takes with Musk in other words, like Musk
is the biggest asset for Tesla, but they don't.

Speaker 3 (06:31):
Have the products. But they don't have products that compete
at those price points and with that test.

Speaker 6 (06:36):
Yeah, So on that point, Look, it's so much spends
time in China, like competition, Bid neo xpaying everything. We've
seen clearly it's become much more of a competitive market.
I just I continue to view is that Tesla is
still a gold standard globally when it comes to EV's.
I think when it comes to China, Look the big

(06:58):
game right now that they're a win. It's not this
sid about deliveries, it's about can they win the autonomous
and robotics future. That book that is the way you
get to two trillion, The way you get to trillion
dollar incremental evaluation because of autonomous is that way.

Speaker 1 (07:17):
You know, it's interesting that you say that because one
of our producers Sebastian Escobar said, Hey, Weimos are coming
to my town where I live in, which is just
across from Loower Manhattan, And I'm like, wait what? And
Weimo seem to be expanding pretty aggressively, and so it

(07:39):
does seem like folks are going after what could be
ultimately the future right of Tesla. I really autonomous works.
I mean that's where the growth comes right going forward
for Tesla in your.

Speaker 6 (07:52):
View, sure, but to that point, I look, weymos are
two undred thousand dollars cars, like you're essentially in five
six cities. Yeah, when you do about the scale and
Scoop Tessa were talking about twenty twenty five cities over
the next year. When it comes to robo attack, I mean,
that's the whole opportunity, Like when you think about twenty
percent of what I view is like ride sharing over

(08:14):
the next four or five years is going to be autonomous,
no driver. So that's the opportunity that Tessa is going after.
But then it goes back to politically, you can't have Trump, Duffy,
whoever else you want to talk about for administration now
as a friend, but as a foe when you go

(08:35):
into the most important chapter of growth and success. What
I view on the horizon for Tesla has has.

Speaker 1 (08:44):
Elon reached out to have you reached out to him?

Speaker 5 (08:46):
I mean, I won't comment there.

Speaker 6 (08:48):
I would just say that, like, the message has definitely
been received by Elon, It's been received by the board,
and that was my goal, right, Like my goal is
is that sometimes it's like tough love, right, Like the
point is like it comes down to like if you
don't reprimand or whatever, if you like, you know, it's

(09:10):
like there's good times in bad times, but this is
a time and the stock reflects it that the board,
the adults.

Speaker 5 (09:20):
In the room, what everyone want to talk about. They
need to weigh the guard rails.

Speaker 6 (09:25):
Out from Musk, especially around the political ambition.

Speaker 5 (09:29):
That that is the key.

Speaker 3 (09:31):
Dan, How does it feel to have Elon Musk tell
you to in all seriousness? What did it feel like
to have him tell you to shut up? On his platform?
He's got I don't even know how many followers he has.
It has to be over one hundred million, hundreds of
Millik's like two hundred and twenty million followers. How did
that feel? I mean, I imagine too as his sort

(09:52):
of army came after you as well.

Speaker 6 (09:54):
Yeah, I don't you know you we knew each other. Well,
It's like I don't worry about that. I mean, to me,
I just actually view it more as like he has
his right to an opinion. I disagree. I'm a huge
supporter him and Tessa, but I'm more focused on, like
it creating dialogue, Like he'll say shut up Dan, and

(10:16):
I have one hundred memes sent to me about different
shut up Dan stuff and actually got in the street
yesterday yelled from New York City across the streets like
shut up Dance. So that's that's that's that's cool. But
to me, it's about creating the dialogue because now it's like, Okay,
what what is the community?

Speaker 5 (10:35):
What is ship?

Speaker 6 (10:36):
I'm here from sheeralders all day. Right, that's the important thing.
What it means for the Tesla story. That's the whole goal.

Speaker 1 (10:44):
I wonder has the board reached out to you and said, hey,
thanks Stan for that?

Speaker 7 (10:52):
Yeah?

Speaker 6 (10:52):
No, I mean, I just the good thing is like
I feel like I definitely feel like this message has
been received by the you know, I think everyone's seeing it.
And at least now now it comes down to like, Okay,
are there actions like does what does the board do
with the next pay package? Remember is the other fifty

(11:13):
six billion dollar pay package is still in the legal
sort of wimbow because of Delaware Foxy still hasn't been
you know, ultimately sent. That's been the way. So this
is a key period of time for the board.

Speaker 5 (11:27):
From Musk.

Speaker 1 (11:29):
Another message that was received for the world of Elon
Musk was from the CEO of X, Linda Yakarino, stepping
down a CEO after two years post on X decided
to step down as CEO. I'll be cheering you all
as you continue to change the world. What's your view
on that? What's how do we read it?

Speaker 6 (11:50):
I think I have a very positive view of her, right,
besides the fact that she's a Penn Stater.

Speaker 5 (11:56):
We are, but.

Speaker 6 (11:58):
All right, let you know, but my view is she
turned around acts. She navigated massive political storm, right. I
think very few people could have done the advertising.

Speaker 5 (12:14):
I think a lot of it has rebound. There's still
obviously queer headwinds, but I think.

Speaker 6 (12:19):
Like this is like, look, it's it's huge shoes to fill,
Like it is a big hole. Herd weaving because she
is a unique background because of advertising because of her personality.
I think she got along very well with Musk. So
it is it is a huge you know what I view,
it's a negative. But now it comes down like who

(12:41):
fills that role?

Speaker 8 (12:43):
Yeah?

Speaker 1 (12:45):
Interesting stuff. Listen, We're so glad we could catch up
with you here. Yeah, we really, we really appreciate it.

Speaker 5 (12:52):
I'm so glad to be here and talking. This is
a you know, get the popcorn out. A lot of
soap operas ahead pack.

Speaker 3 (13:00):
If you want to not be yelled on the street, Dan,
you're gonna have to tone down the wardrobe a little
bit and go incognito and not wear the signature. Dan
ives closed. I don't know if you need to go incognito,
but you know I love it. We love it. Dan
Id's global head of Technology research at web Bush Securities.
Joining us from New York.

Speaker 2 (13:23):
You're listening to the Bloomberg Business Weekdaily Podcast. Catch us
live weekday afternoons from two to five pm Eastern Listen
on Apple CarPlay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.

Speaker 3 (13:37):
Well, if you've built a deck in the last few years,
you probably know about Treks. The company makes composite decking
for mostly recycled materials, including reclaimed wood and polyethylene film.
Trex is publicly traded. It's got a market cap of
about six point one billion dollars. The stock's down around
seventeen percent so far this year. Like many companies in
housing and home improvement, it has been a challenging first

(13:58):
half of the year. Brian Thanks is with us. He's
president and CEO of Tracks. He joins US in the
Bloomberg Interactive Brokers studio. Brian, welcome, How are you?

Speaker 9 (14:06):
Thanks? Great to be here?

Speaker 10 (14:07):
Well, welcome.

Speaker 3 (14:08):
Welcome. Trek sales in more than forty countries, so that's
kind of where I want to start. How is the
environment in the US for your customers, for your potential
customers versus other parts of the world that you sell
in the US?

Speaker 9 (14:21):
Environment is still relatively strong. Most of our consumers are
going to be family income of one hundred twenty thousand
dollars plus, and we've all talked for a long time
about the bifurcation of the premium customer versus the entry
level customer. Because most of our customers are that one
hundred plus. We've continued to do well in the marketplace

(14:42):
this year. We gie to five to seven percent growth.
We reiterated that guy just a couple of weeks ago.
Our contractors generally have six to eight week type backlogs
at this point, and overall we're pleased with what we're
seeing in the market.

Speaker 11 (14:56):
Where are most of the sales coming from. Is it
people homeowners who who are putting in a deck for
the first time, or are they remodeling or are they
just completely kind of I guess yeah, remodeling their backyard.

Speaker 9 (15:08):
All the above, But more often than not, it's going
to be a consumer that's already experienced a wood deck.
It's failed between twelve to fifteen years, maybe eighteen years.
On the long end of it. The quality of pressure
treated lumber is not what it used to be, so
that decision and the payback period of putting in a
treks deck versus a wood deck is very different today.

(15:29):
But we also put on a lot of new decks
on new homes as well as homes that are just
looking for existing square footage. More difficult to move up
to that larger home. Now, how do I add more
space to entertain with your friend's family, and it put
a deck on the back of the house.

Speaker 3 (15:44):
But isn't a deck built with treks framed by pressure
treated wood under it anyway?

Speaker 10 (15:51):
That's correct?

Speaker 3 (15:51):
So is that is that an issue? Ever, where the
wood that provides the framing the structure that doesn't last
as long as the.

Speaker 9 (16:00):
That structure is going to be protected by the trek,
so it doesn't get nearly the same beating from a
weather perspective or for chemicals, UV rays, things like that,
so that structure tends to last quite a bit longer,
whereas the decking itself is what's subject to the majority
of the environmental conditions.

Speaker 3 (16:17):
So what exactly is it made of? On the website
it says that it is made of mostly recycled materials,
reclaimed wood, polyethylene film.

Speaker 9 (16:25):
What's the secret sauce at ninety five percent recycled and
reclaimed material. So the recycled piece of it is going
to be the polyethylene films that we buy from all
over the country and up into Canada. It's about one
thousand pounds bail of film. We'll bring that in, we'll
reprocess it, and then we also purchase wood furniture flooring
manufacturers from some other sources as well to mix that

(16:48):
together with the plastic, we extrude it into a deck board.
We apply our proprietary shell on the board to give
it its fade, stain and scratch characteristics. That's pretty much
the way it's done. Buying recycled materials does give us
a healthy cost advantage. We can be buying plastic anywhere
between five cents and up thirty cents for cleaner plastic.

(17:09):
We still have to process it, so there's some additional
cost added, whereas virgin materials are going to be sixty
to seventy cents per pound.

Speaker 3 (17:16):
You mentioned buying some product at least from Canada, the
polyethylene film. The tariff situation, we've spent the whole day
talking about clarity or lack thereof that we are getting
that CEOs and business owners are getting right now from Washington.
How have tariffs affected you.

Speaker 9 (17:31):
Well, there's a lack of clarity, that's for sure. For CEOs,
we are primarily a US manufacturing company. We've got three
manufacturing sites, one in Virginia, one in Nevada, and then
we're building a green field site in Little Rock, Arkansas
that we're excited about. Today. We are recycling plastic in
Little Rock, and then we're moving that to our other
two plants to use there As we continue to build

(17:53):
out that facility, less than five percent of our cost
of goods sold is going to be impacted by tariffs,
And in looking at the those tariffs, we look at
how can we potentially source out of other countries, negotiating
with those vendors, and then eventually taking pricing. We've taken
a very conservative view of pricing of let's try to
let tariffs settle out of where their endpoint is going

(18:15):
to be, rather than immediately reacting the day the announcements
were made.

Speaker 11 (18:19):
So we're tim asked about the tariffs, I'm going to
ask about the big beautiful bill. We're going to hit
you with the two main current events of the news
cycle right now. Have you heard anything from the consumer
about how this bill is going to impact their spending behavior?

Speaker 9 (18:35):
It is too early. I think everybody is just beginning
to digest everything that's actually in that bill, and so
I've not really had any feedback from it as of yet.
We haven't had a chance to pull our contractors or
work further with our consumers as well as all of
those dealers as well as retail channel locations.

Speaker 3 (18:54):
I know you're ninety five percent repair remodel based. So
the housing market weakness that we've seen when it comes
to new housing isn't necessarily Can we can we do
a do a through line from housing data to you
or is this all about, Hey, somebody's been in a house,
they want to put in a new deck, they're going
to they're going to use tracks. Is there any is

(19:16):
there any anything that comes you know, when you're talking
about new housing demand and like people buying new homes
that that accompanies demand and tracks.

Speaker 9 (19:23):
The only impact with the new home buying side of
things is it does generate existing home sales. We've all
seen existing home sales have been lower the past couple
of years. That has driven repair and remodel spending negative numbers.
The past couple of years, we've been able to well
out growth that mid single digit growth for US small
single digit negative growth in repair and remodels. So we've

(19:47):
been able to well out perform at but it would
be great to see the existing home sale side of
things really pick up and drive that remodeling engine.

Speaker 3 (19:55):
Do you work at all with the large developers of
property or the large homebuilders like the Lenar's or the
KB Homes, for example, to use your materials.

Speaker 9 (20:05):
We do. We've had agreement with the majority of the
large home builders that are in the marketplace, so it
is an important part of our business. But generally we're
about ninety five ninety to ninety five percent repair, remodel
the remainder.

Speaker 11 (20:18):
Of that on new home You guys have a pretty
large part of the market share, but that's not for
lack of competition. James Hardy just closed on its acquisition
of Aazec, which is your largest competitor. How are you
thinking about keeping that market share now that there's been
a pretty big deal in the space.

Speaker 9 (20:35):
It's a highly concentrated market. As you mentioned, we're about
fifty percent. Azak TimberTech roughly thirty percent of the marketplace,
and they've always been a good competitor, and I think
it makes both of us better having good competitors that
are out there. We're not going to be seating market share.

Speaker 3 (20:51):
Back to tariffs in terms of how the product is
purchased outside of the US retaliatory tarraf from other countries.
Has that been an issue yet for you?

Speaker 9 (21:04):
It has not been an issue, and that goes back
to the fact that we're ninety five percent US source
US manium.

Speaker 3 (21:10):
But if you're US source and US manufactured, let's say
you want to export the US product.

Speaker 9 (21:15):
Right, I see on the flip side, Yeah, the flip.

Speaker 3 (21:17):
Side of that would be another country saying, wait a second,
we don't want you to buy this product from the
US because we're entering this period of global trade that
is more insular, where we're seeing sort of like the
world is not flat anymore. You know, it's been a
kind of a weird twenty five years. Is that is
that on your radar at all?

Speaker 9 (21:38):
Our international sales are a small part of the overall company.
Now we do ship to forty countries around the world.
We've not heard any of that feedback as of yet.
Because we get further in the year and the tariff
structure settles out to where it's going to end up being,
I expect there'll be some additional discussions around that and
we'll hear more feedback from some of those countries.

Speaker 6 (22:00):
How do you.

Speaker 11 (22:00):
Guys kind of deal with the rising rising commodities prices?
I remember writing an article a couple of years ago
when lumber was just absolutely soaring, and I wrote about
like wood alternative companies doing really well in the face
of that, But I imagine that you do have to
source some materials and if inflation does persist, is that

(22:21):
an issue.

Speaker 9 (22:22):
Sure, inflation absolutely hits our business during the pandemic. We
raise prices like many other building product makers. We also
have a strong internal improvement program where we look at
all of the costs that we can control and understand
how can we take cost out of the business so
that we can fund some of those cost increases. Internally,
we know every year the cost of labor is going

(22:43):
to go up, certain commodity costs are going to go
up along the way. How much of that can we
fund by our own internal engineering R and D efforts
and our own efficiency efforts. But sometimes we do have
to take pricing to be able to cover those additional costs.

Speaker 3 (22:58):
One of the big selling points of Track is just
how long it lasts. This idea of not having to
replace a deck for twenty five years, for example. That
also means that when somebody purchases the product from you,
they're probably not going to buy anything else from you.
How do you build a part of the business that's
like not necessarily services, but more ancillary products that are

(23:21):
add ons or how do you get that existing customer
who knows about trucks to spend more money with you?

Speaker 9 (23:25):
Right, that's an important point. Our warranties are anywhere from
twenty five up to fifty years. This product will last
a long time, but the market size is such a
there's fifty to sixty million decks in North America. Half
of those decks are at or beyond their serviceable life. Today,
composites account for about twenty five percent of the volume
of decking that's sold. So there is a large opportunity

(23:48):
out there to go convert more of that wood business
into Trek's composite business.

Speaker 3 (23:53):
Is new business still wood business? Like are people still
building wood decks?

Speaker 9 (23:57):
People are still building wood decks yet?

Speaker 3 (23:59):
Well, why are they doing that when this like, when
they're in that moment of truth where they're choosing their material,
Why are they still going with wood?

Speaker 9 (24:06):
A lot of it is because that's what they know,
that's what they've done in the past. So the challenge
for us is making sure that we're in front of
that consumer while they're making that decision, showing them that
we have products. In the case of the decking product
are enhanced basics is roughly two times the price of lumber.
So for an extra eight hundred dollars, you can have

(24:26):
a Trek surface on your deck and prices go up
from there. For an extra five hundred dollars. On top
of that, move up to our next line, our Treks
Enhance Naturals product line. So it's really important that our
marketing engine gets in front of those consumers before they're
making that final decision social media.

Speaker 11 (24:43):
I've seen some of your social media content.

Speaker 3 (24:45):
Ah, Trek's TikTok?

Speaker 5 (24:46):
Is that what it is?

Speaker 11 (24:48):
It's other people on social media stick.

Speaker 10 (24:50):
About their deck.

Speaker 3 (24:51):
Oh interesting, I haven't seen that. Hey, Brian, thanks for
stopping by. It's been a couple of years. Do appreciate
you taking the time. Brian Fairbanks, President and CEO of Tracks,
joining us here in the Bloomberg Interactive Broker's studio.

Speaker 2 (25:03):
This is the Bloomberg Business Week Daily Podcast. Listen live
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Just Say Alexa played Bloomberg eleven thirty.

Speaker 1 (25:21):
Amazon held its annual Prime Day this past weekend for
the first time ever. It happened over a course of
four days, Amazon betting the extension would give shoppers more
time to navigate the millions of deals despite terror related
price worries, a.

Speaker 3 (25:34):
Bunch of robots lending a helping hand to get orders
out to customers. In fact, Amazon marked a milestone earlier
this month when an announced it's now using over one
million robots in its warehouses. That's actually about the same
number of human employees at the facilities. The news comes
at a time when more tech companies are making job
cuts and issuing automation warnings.

Speaker 1 (25:54):
Ty Brady is the chief technologist for robotics at Amazon.
He joined Matt Miller and me all the way from Tokyo, Japan.
It was in the middle of the night when he
spoke with us, but it was weird that one millionth
robot was deployed in a Japanese fulfillment warehouse.

Speaker 12 (26:08):
It's an incredible achievement. I'm so proud of our team
to be able to deploy more than one million robots
to our global fleet. Our one millionth robot. I'm here
in Tokyo. We actually deliver it to a fulfillment center
in Chiba here in Japan, a great region for us
for sure, And the way that we see it is

(26:31):
it's really a force multiplier for both safety for our
employees and also for the efficiencies getting those goods right
to our customer's door on time, at a low cost,
just in time for prime day.

Speaker 10 (26:42):
So when we talk about robots, I don't think of
the roomba. I think of C three PO and that
doesn't seem to be where we are quite yet, certainly
not in America, right we don't have a bunch of
humanoid androids running around. How far away is that?

Speaker 12 (27:00):
Matt, You're speaking my love language, because when I think
of robots, I actually think of R two D two,
not C three PO. Because I do want to remind
you who is in the back of the X Wing
Fighter when Luke Skywalker had to go into into the
desk Star. That was R two D two.

Speaker 5 (27:16):
And why I love R.

Speaker 12 (27:17):
Two do and actually R two D two was the
inspiration for my entire career. It's because R two D
two helps a Jedi be more Jedi. And that's kind
of the way that we view our robotics. Inside of Amazon.
We see our robotics as an extension and amplification of
what a person can do. Just like any great robots,
it should be a tool centered around a person, right,

(27:40):
So we put people at the center of the robotics universe.
That's what we've done with a million robots that we've
deployed out there, whether it's in mobility or manipulation. We
are giving our frontline employees the right tool set in
order to do their jobs more efficiently, and we're also
created more safety for them.

Speaker 10 (27:57):
Hi, where's it all going?

Speaker 1 (27:58):
And I asked that if we're giving you know, increasingly,
you've got these robots, you've got AI and all of
this is assisting workers, Like, where is it all headed?

Speaker 12 (28:07):
Yeah, it's well, I really do believe that we're pioneering
the field of collaborative robotics. So as we continue to
gain efficiencies, as we continue to create safety for our employees,
we become more productive. That has clearly worked inside of
Amazon and frankly for e commerce, where we see that
if you can build your robots in the right way

(28:30):
that amplifies human potential and as a system that works
with people. It's not people versus machines, but it's machines
and people working together nor to the job. We have
really revolutionized that field. So what we have seen historically
is the more robots that we have added, and this

(28:50):
is now over a ten years plus since Amazon really
got serious about robotics, We've created hundreds of thousands of
new jobs, and we've also even created new job types.
So where I see it going is that the onus
is on us roboticists to build our machines in a
way that is intuitive and natural for people to use,
to build them with specific intent in the functions in

(29:12):
order to help people do their jobs better. And my
goal is to eliminate the menial, the mundane, and the repetitive.
I aim to eliminate every single one of those tasks
and allow people to think at a higher level and
use the tool set in order to get the job done.

Speaker 10 (29:29):
What kind of robots are helping you deal with? Like
Prime Day, for instance, it's coming up. I think July
eighth is when it kicks off massive shopping day for
people around the world, but also for people in Amazon warehouses.
I mean, do they have like an exoskeleton like tom Cruise,
an Edge of Tomorrow or is it actually you know,

(29:51):
a humanoid that's running around picking up orders and putting
them in boxes to ship out.

Speaker 12 (29:56):
Yeah, we think of function first before form, right, So
and when you say humanoid, that's really form base. But
the functions that we really index on in robotics is
the ability to move items from one side of the
warehouse to another, or manipulate items, or store or sort
or identify and pack those items. That's really what we do.
So if you were to walk into one of our

(30:17):
fulfillment centers, you would see these little drive units moving
goods at will. Thousands and thousands of these drive units
moving our pods to a person in order to pick
out those items. You would see robotic arms picking up
heavy packages. These are the repetitive jobs that I speak of.

(30:37):
Before picking up heavy packages and moving those into sortation systems.
You would see sortation drives moving to the right and
correct spot in order to bring it to the truck.
You would see a cute little robot that we call Proteus,
and that's the safety certified around people that can move
these large containers of goods to the right truck at

(30:58):
the right time. So it's really the symphony of people
and machines that working together, which is really incredible to see.
And it's a very practical in a very practical manner,
and that's something that I'm very proud of because this
application is really what's driving the fundamentals of robotics. It
allows us to be adaptive and more modular or creating
the safer environment for our employees and also frankly, gaining

(31:21):
a lot of efficiencies.

Speaker 1 (31:22):
Hey, Ty, it does look like we're just showing some
pictures out there for those who are watching us right now,
and it does look like robots are increasingly becoming more
quote unquote human like in terms of standing up and
having kind of appendages.

Speaker 10 (31:35):
That's the form he doesn't want to talk about.

Speaker 1 (31:37):
I know, I know you don't, but I want to
go to something Times of London out Andy Jassey. Of course,
you're chief executive sending a memo to staff in June
saying he expected it's corporate workforce with shrink as it
rolls out AI, and this was the quote, we will
need fewer people doing some of the jobs that are
being done today and more people doing other types of jobs.
In the next few years. We expect that this will
reduce our total corporate workforce as we get efficiency gains

(32:00):
from using AI extensively across the company. That's AI. But
I do think about AI and robotics really increasingly merging
replacing workers. How close are you guys to using more
robots than humans in your warehouses?

Speaker 12 (32:13):
Yeah, it's a it's a great quote, first of all,
and I do want to point out the difference between
there's AI systems and there's physical AI systems.

Speaker 5 (32:21):
Right.

Speaker 12 (32:21):
So you can think of an AI system as the
digital chess that's in your computer and you can play
chess there, but physical AI is that you would want
a system with a real chess board in front of you.
We're actually picking up the pieces and moving those pieces, right,
So this physical association, and what we have seen is
when we build the right tool set for our employees,
what we do is we really increase productivity for our employees.

(32:46):
And what that does is that allows us to invest
more in two key areas. We invest in better collabative robotics, right,
a better tool set for employees to use, and we
all also invest in our people.

Speaker 5 (32:57):
Right.

Speaker 1 (32:57):
We have.

Speaker 12 (32:59):
Ups more than seven hundred thousand of our employees. It's
really important to be mindful of upskilling it's important to
realize that jobs will change over time. There's no doubt
about that. And our aim is to give our employees,
in particular our frontline employees, the best tool set possible
for them to do their jobs.

Speaker 1 (33:18):
So I love that upskilling figure, And it sounds like
you guys are prioritizing certainly making sure your employees they
can kind of move up or move on to where
you guys have demand and where you need workers. But
I do want to go back to is there a
point where you do have more robots than humans in
your warehouses?

Speaker 8 (33:36):
And are you clothes?

Speaker 12 (33:38):
Yeah, it's just be careful about the correlation because imagine
your let's just say that you're a carpenter, right. What
I aim to do is give that carpenter the best
tool set possible. I don't really count the number of
tools that they would have, but instead I would actually
index on the effectiveness of those tools. Are we allowing
that carpenter to do their art and create or build

(34:00):
the house in a shorter amount of time with even
higher quality and create it as safer environment? So I
mean we could index on the numbers. We're proud of
the numbers that we have for sure, because it represents
some really pioneering work by the many women and women
and men scientists and engineers that have designed them. But
remember we also manufacture these, so we have manufacturing jobs.

(34:23):
Remember we support these in the field, we deploy these
live in the field, and then of course we have
our frontline operators that we're very, very thankful for. So
it's a full ecosystem that when it's really a force
multiplier when you do robotics right, when you do robotics
that extends a person's capability to do their job, amplifies

(34:45):
the human potential, then you really have changed the game.
And that's what that's why today's one million. It's a
one million force multiplier for our employees for the benefit
of our employees and also for the benefits of our
customers because we know that they love to have the
world's largest selection of goods. Robotics helps with that. We
can actually as compared to our manual buildings, we can
storm more than forty percent more goods in the same footprint.

(35:08):
We know that it fuels a lower cost that we
can pass along to our customer because of the efficiency
gains inside of our entire fulfillment chain. And we know
what fuels the fast delivery times that we know our
customers love because we have the ability to pull any
order really quickly and bring that the right, good, right
to the customers. So robotics is helping spin that flywheel.

Speaker 10 (35:30):
Carol has never gotten over Eric Brynjolfson's book Race Against
the Machine, and so that's what she's asking about. You
went to MIT, right, and so you know that, you know, Brinjoe.

Speaker 1 (35:43):
Here's the thing. I think it's great robotics, especially some
of those tedious jobs, repetitive jobs, physical jobs. And then
if you're upscaling to you know, people who are working
now on creating the robots. Like, I think it's a
pretty cool thing.

Speaker 10 (35:56):
I think, you know, it's supposed to be dystopian, but
I the idea in Wally that we will eventually just
float around in debt chairs on a cruise ship, drinking
icys while the robots do our work for us and
get paid dividends. What do you think about that kind
of future? And I especially wonder about cryptocurrencies being used

(36:18):
because machines will have to work with machines and transact.
And this was the idea that we were kind of
sold on at the birth of bitcoin. But is there
any is there anything that's not science fiction to that idea?

Speaker 12 (36:32):
Well, I can tell you what we're doing is definitely
not science fiction. It's actually very practical and applied, and
it's it's giving a great success to our employees and
it's also benefiting our customers very directly.

Speaker 3 (36:48):
That was Ty Brady, chief technologist for robotics over at Amazon.
Matt Miller also there. He'll be back in our next.

Speaker 1 (36:54):
Hour, and I got to say, we want to have
tie back really soon. Tim, You will love this guy.
He's so into robotics but really understanding the science, the
technology and kind of where we're going with all of this.

Speaker 3 (37:04):
But he's fully human. He's not part robout it.

Speaker 1 (37:07):
All as long as I know, as far as I know,
all right. That wraps up our first hour of the
weekend edition of Bloomberg Business Week from Bloomberg Radio. Ahead
in our next hour, US landfills are heating to dangerous levels.
It's viewing trash, juice and toxic emissions, and it's making
people sick.

Speaker 3 (37:21):
We'll explaining plus building a new sports and entertainment empire
with the parent of the Brooklyn Nets in New York Liberty.

Speaker 1 (37:29):
This is Bloomberg Business Week. I'm Carol Masser and.

Speaker 3 (37:31):
I'm Tim Stenovik.

Speaker 2 (37:36):
You are listening to the Bloomberg Business Weekdaily Podcast. Catch
us live weekday afternoons from two to five pm Eastern.
Listen on Apple CarPlay and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.

Speaker 1 (37:50):
Plenty Ahead in our second hour of the weekend edition
of Bloomberg Business Week, including how all those global tariffs,
some in place, some to come maybe are affecting one
small business in the luxury space.

Speaker 3 (38:01):
Plus as sports team valuations rise, the corporate empires running
them are thriving. On that, we check in with the
CEO of Brooklyn Sports and Entertainment. It's the parent company
of the Brooklyn Nets and New York Liberty.

Speaker 1 (38:13):
First up this hour, addressing America's hot garbage problem. It
was recently one of the most red stories on the
Bloomberg and a Bloomberg Big Take. It explores one of
the lesser known environmental fiascos in the United States. We
are talking about toxic landfills.

Speaker 3 (38:28):
Bloomberg BusinessWeek writers Laura Bliss and Rachel Doddell reported and
analyzed just how overheating waste below the surface of US
landfills is harming the environment and surrounding communities which are
left with little recourse. Laura joined Carol and Matt Miller,
and she began by discussing one of the US's largest
repositories of municipal waste, the Chiquita Canyon Landfill in Los Angeles.

Speaker 7 (38:50):
The landfall that you mentioned in La County is a
great example, and pockets of buried waste in this landfill
have been rising to temperatures over two hundred degrees for
the past three years. That's about forty percent higher than
the EPA safety standard.

Speaker 4 (39:08):
California regulators suspect.

Speaker 7 (39:10):
That what's causing this is too much much oxygen getting
into this landfill, which is a problem known to start fires.
This goes against federal regulations. The landfill operator says that's
not the case, says nothing is on fire. And as
I found out, these landfills that have been overheating are
a phenomenon that we've seen across the US over the

(39:32):
last twenty years, and there's real debate, there's real controversy,
you know, within the industry, in between regulators about what's
causing them.

Speaker 4 (39:42):
And what to do about it.

Speaker 10 (39:44):
Laura, First of all, I read your story the first
thing I read on the Bloomberg and I could not
put it down. And you know, I'm the type of
reader who typically gets goes to the first four paragraphs.
I'm from the Matt Winkler school of Bloomberg and then
I'm done. So fantastic job writing this. Uh. One question
I did have is isn't it pretty easy to determine

(40:05):
whether something is on fire or not? I mean, it
seems like you could gauge that pretty quickly.

Speaker 4 (40:13):
You would, You would think so, you would think so.

Speaker 7 (40:15):
And a challenge with these incidents is that, you know,
the the temperature climbs. You know, this is happening several
feet below the surface of the landfill, and so you
don't necessarily see smoke. You don't necessarily smell, you know,
what you might think of as a burning smell. You know,
these events can can manifest in a lot of different ways.

(40:37):
And it's because actually that you don't necessarily see those
you know, classic fire symptoms that the industry is saying, well,
this is this is not a fire. We think it's
something else that's that's going on here. But as the
story shows, and thank you so much for reading it.
I mean, you know, regardless of what we call it,
you know, residents are getting sick, and there's a lot
of challenges in really dressing the problem and kind of

(41:01):
getting to the root cause.

Speaker 1 (41:02):
What's exactly what's crazy is like people are getting caught
up is it a fire? Is it not a fire?
And there's all these terminal terminology, subsurface oxidation, smoldering events.

Speaker 10 (41:13):
But it's an important.

Speaker 1 (41:13):
Distinction because you write the distinction is in trivial federal
regulations explicitly forbid operators from running landfills in a way
that starts fires. Why is that so important, especially when
you so clearly write that people who are living nearby,
they and their families are getting pretty sick.

Speaker 7 (41:31):
Absolutely, I mean it's it's been, you know, a well
known issue in the industry for years. You know that
these fires can create really dangerous and toxic situations.

Speaker 4 (41:40):
And you know, among the you know.

Speaker 7 (41:42):
Few regulations that are out there at the federal level
for landfills, you know, don't start a fire is absolutely
one of them. And you know, one of the concerning
things that I found is that one of the key
rules that environmental engineers and safety advocates say, you know,
was really there to prevent fire was actually rolled back,

(42:02):
and so you know, as far as like what is
there to do about it? That is something that a
number of scientists highlighted for me that we we need
the return of some of these rules, for example, to
stop too much oxygen from getting in because as we
all know, right that can that can start fires when
you when you mix that with hot enough temperatures.

Speaker 1 (42:20):
And the point is it starts fires, but it also
gives off really dangerous gases, right, and and talk to
us about what's happening to people who live nearby.

Speaker 7 (42:31):
Yeah, I mean, so just to take the Chiquita Canyon
landfall as an example, I mean, we see elevated levels
of benzene, you know, a known carcinogen, carbon monoxide, other
toxic gases that are known you know, to cause the
kind of respiratory, neurological, cardiovascular symptoms that people are reporting,

(42:52):
you know, hand tremors, headaches, nosebleeds that won't end. You know,
people are having you know, cancer also, And one wondering,
you know, is what's going on with the landfill having
to do with my diagnosis.

Speaker 10 (43:05):
So what can these people do about it? I mean,
as I was reading your story, I had a feeling
of like frustration in my chest because it's so hard
to prove causation.

Speaker 9 (43:17):
Right.

Speaker 10 (43:17):
People are getting sick who don't live near the landfill also,
and these corporations have seemingly endless pools of money for litigation.
I think of dark Waters. I think of Aaron Brockovich.
You know, what can the houses who is the couple
that you that you write about in your lead, what
can they do about it?

Speaker 4 (43:39):
Yeah, I mean it's a great question.

Speaker 7 (43:41):
There are like I think over a dozen, you know,
mass torts moving through the legal system right now of
residents trying to take legal action to represent themselves. Los
Angeles County has also sued you know this at the
state regulatory level. There have been a lot of enforcement actions,
and I think, what a lot of these efforts are
all kind of pushing for our funds, you know, from

(44:03):
the operator, to fund the relocation of residents right to
get out of this danger zone. And so I think
that is what a lot of people are pushing for
at this point. But you know there's also I write
about in the story Polar Chiavo who's an assembly member
in California has a has a bill that's she's you know,
I think, is awaiting a hearing in the state Senate

(44:24):
that would basically just attach more you know, penalties right
to landfills in the future that you know, exhibit these
symptoms that are cause these kinds of problems for people.
What do the companies say, Well, just to reiterate, right,
they say that this is not a fire. This is
what they call an elevated temperature landfill, which is a
term that you know, the industry is applied to at

(44:46):
least ten, you know, large landfills across the US over
the last twenty years that have exhibited similar symptoms. And
you know, they pointed to you know, millions of dollars
that they've spent in mitigating the problem, adding gas wells
to trap the odors, putting a cover on top, you know,
contributing some money to residents to you know, buy air

(45:06):
filters and things like that.

Speaker 10 (45:08):
Why don't they just go in there with cranes and
dump trucks and move it away. I mean, there is
a temperature regulation, right, They're not allowed to be above
a certain temperature, and you can just stick a thermometer
in there and see that this does exceed that regulation.

Speaker 4 (45:23):
It's true, It's absolutely true.

Speaker 7 (45:26):
I think the challenge is, you know, what do you
do when these kind of hot temperatures become this kind
of runaway problem?

Speaker 4 (45:34):
And again the question of causation, what to call it?

Speaker 7 (45:38):
Like this this all matters, right, because that drives it
the question of what do you do about it? And
California regulators say you need to dig a fire break,
which is actually not unlike what you're saying, right, you
need to sort of create almost a trench, right to
stop this reaction from progressing. The operator says that that
would make things much worse. They say that the solution

(45:59):
is to pulling heat out using these wells. So there's
just there's a lot of disagreement there, well.

Speaker 1 (46:07):
You know, and I feel like it gets into a
bigger problem in the United States, and that has to
do with waste, right, like what do we do with it?

Speaker 10 (46:16):
You know?

Speaker 1 (46:16):
If you can't you know, I think there's pushback against
creating new waste facilities, right or waste or dumps based
on one in exactly exactly. So then what you have
to do is deal with the existing ones and just
pile more and more stuff into it. I mean, as
you noted in our in your story, is that for
a long time people burn garbage. We thought that was
the way to do it, and then we realized, okay,

(46:37):
that's not the way. I mean, and doing kind of
also some you know, giving us a little bit of
a history lesson in terms of dealing with garbage. I mean,
this is again becoming another big problem, not only maybe
potentially for the health of US citizens, but also for
the climate.

Speaker 7 (46:53):
Yeah, I mean absolutely, I think this, this whole situation
is a great and really alarming, you know picture of
the problems that can arise, like when we just keep
kind of piling our trash higher and deeper, right, And
I mean I will also add that, you know, safety
advocates will say, you know, we don't we're going to
generate trash, right, we know that we're gonna that trash

(47:15):
is going to generate methane emissions. And that's kind of
part of the story too, because trapping these emissions, you
use these wells that can actually lead to more oxygen intrusion,
which is known to start these fires.

Speaker 4 (47:26):
And so you know, advocates will say, like we just
need better monitoring.

Speaker 7 (47:30):
Right, we need you know, better technology to monitor emission levels,
you know, real time temperature monitoring for example, so that
you know, operators and regulators can take action more quickly
instead of you know, letting problems kind of spiral.

Speaker 10 (47:46):
Well, and as Carol and I were talking about this yesterday,
one of the great things to do would be to
stop generating as much waste. Right. I was over the
weekend camping looking for a spoon, and I went to
a store and they had a box of two hundred
plastic ones if I wanted it. But that's part of
the problem.

Speaker 1 (48:03):
Yeah, like making things that you actually want, you go
to attack.

Speaker 10 (48:06):
The problem at the root, right, Laura, I'm sure you've
thought about.

Speaker 12 (48:08):
This a lot.

Speaker 4 (48:09):
Absolutely. I mean it's funny.

Speaker 7 (48:11):
I part of the way I celebrated publishing this story
yesterday was taking the base of my dead electric toothbrush
to a battery recycling facility, which, even in the city
of San Francisco, was not that easy to find. But
that's another problem. That's another you know issue of this too. Right,
We're not just generating more waste, we also have a

(48:31):
lot more flammable waste, you know, vapes e cigarettes like
these kinds of things, and so you know, figuring out
the right safest place to put it is important too.

Speaker 1 (48:41):
Yeah, and you bring on the recycling experts to it,
they'll say, you know, you think so much stuff is
being recycling, but it recycled. But it's not necessarily ape case.

Speaker 10 (48:48):
Doesn't everybody now have a drawer full of dead vape batteries?
Not in my hand?

Speaker 1 (48:53):
No, Laura, incredible story.

Speaker 4 (48:58):
That's right.

Speaker 1 (48:58):
We were talking about kind of the waste yesterday and
when he saw it this morning, he's like, oh my god,
this is what we've been talking about. It's a great
deep dive and we so appreciate you giving us some
time with it. Laura Bliss, Bloomberg Business Week editor and writer.
Check it out. You can find it on the Bloomberg
and at bloomberg dot com slash BusinessWeek.

Speaker 2 (49:15):
This is the Bloomberg Business Week Daily Podcast. Listen live
each weekday starting at two pm Eastern on Applecarplay and
the Android Auto with the Bloomberg Business app. You can
also listen live on Amazon Alexa from our flagship New
York station, Just Say Alexa played Bloomberg eleven thirty.

Speaker 3 (49:34):
Well The WNBA, known as the WTA fans announced plans
to expand eighteen teams by twenty thirty, adding Philadelphia, Detroit,
and Cleveland to the previously announced Portland and Toronto teams,
which begin play next year. The expansion builds on several
seasons of dramatic growth and comes at a time sports
teams have been getting acquired for record breaking and I

(49:55):
popping amounts. So let's talk about sports and enter aman
and hospitality. We've got Sam Zusman with us. He's CEO
of Brooklyn Sports and Entertainment. It is the parent company
of the NBA's Brooklyn Nets, the WNBA's New York Liberty,
and their home arena at the Barkley Center. We're also
joined by Randall Williams. He's a familiar voice and face

(50:17):
to all of you. He's Bloomberg News Global Business of
Sports reporter. Both of them join us here in the
Bloomberg Studio. Sam, I want to start with you. I
think you know the brand Brooklyn is something that you
are leaning into big time here with the Brooklyn Nets,
also of course with the New York Liberty with the
Barkley Center. But I think people outside of New York

(50:37):
might be surprised to find that the Barkley Center basketball
is a big part of it, but it's not the
biggest part of it by any means. Sort of break
down the share of what comes from basketball versus what
comes from everything else that the Barkley Center does.

Speaker 8 (50:52):
Yeah, so thank you for that, Tim. So, Barkley Center
is a real entertainment mecca. We are open roughly one
hundred and ninety nights a year. We do somewhere around
seventy five to eighty concerts a year. Brooklyn Nets games

(51:15):
around in the forties, Liberty games in the twenties. We
are the third highest grossing arena in the world. And
it's not just about the content, it's also about how
we do it. Our goal at Brooklyn Sports and Entertainment
is to create bold and unique experiences the Brooklyn Way

(51:38):
meaning Brooklyn DNA. Right, if you sort of think about
what Brooklyn stands for globally, not just nationally, for creativity,
for relentless hustle, for authenticity, for diversity. We represent about
one hundred and fifty different cultures, and so we want

(51:58):
to make sure that when you come to an experience
at Barkley Center, whether it's a concert or a game,
you have a unique DNA Brooklyn DNA based experience that
might be different from the experience you would have with
the same game played at a different arena or the
same concert played at a different arena. And we manifest

(52:18):
that with food, with service, with ancillary entertainment, with how
the venue is and the fan experience. The audience experience
is sort of first, then we manifest that.

Speaker 13 (52:34):
So, Sam, one of the things you mentioned was culture,
and the reason I bring that up is because obviously
New York City has a lot of it, but Madison
Square Garden in particular has been open for since nineteen
sixty eight. The Barclay Center opened I believe in twenty
eleven or twenty twelve. You built culture in fifteen years
to become the third excuse me, third highest grossing stadium

(52:55):
arena in the world. What went into that?

Speaker 8 (52:59):
So the work and division of a lot of people
that came before me. But I would say it's focus
first and foremost. But secondarily and maybe first is a
lot of long term thinking. So we are I consider
us and the ownership group to be long term builders.

(53:22):
Everything that we do is with the long term goal.
We're focused on building generational fandom. We're focused on building
the experience, the service that we provide, the training that
we put in, the selection of vendors, the selection of entertainment,

(53:42):
the selection of concerts. If you look at Barkley Center,
it is only to your point, opened in twenty twelve.
It is only thirteen years old, and we've already embarked
on a set of arena renovations with over one hundred
and fifty million dollars over four years. And we've opened

(54:05):
several new clubs that you told me the Crown.

Speaker 10 (54:09):
Club is my favorite. The Crown Club is my favorite. Yeah,
and look, Crime Club literally.

Speaker 8 (54:17):
Is first and unique in its experience, a chef restaurant
with unparalleled wine list, where people come in and they're
havn't the time of their life, you know before.

Speaker 13 (54:32):
For some people who don't even go to the game,
they just go to the Crown Club and sit down
there the entire time. I think, he's your guy, not me,
he's your guy. There a follow up to the renovations.
We're seeing this age of sports teams who have to
renovate these stadiums, and the cost of that continues to
go up. You guys obviously got out ahead of that.

Speaker 5 (54:53):
Why is that.

Speaker 13 (54:54):
Important to say, hey, we're going to put money into
this even though the stadium is less than fifteen years old.
You know, there's a world where the Scy family could
have waited twenty years down the line and be like, okay,
now's the time. But you're out ahead of this.

Speaker 8 (55:05):
Why is that? It is because we're long term thinkers,
and it is because we're audience and fan focused. Right.

Speaker 5 (55:13):
So, just to give you an.

Speaker 8 (55:14):
Example, we have taken two levels of suites and we've
turned them over into bullfacing clubs. Where the reason we
did that was not the utilization. The reason we did
that is that we notice that the consumption pattern and

(55:36):
the preference of the audience has shifted. People like less
to run from their seats to buy something and run
back and miss the game and so on.

Speaker 10 (55:48):
There are there are.

Speaker 8 (55:50):
Folks who come in. Look when you look at overall,
how you experience a concert or a game, it's an experience.
It's it's it's it's entertainment. And so if you can
offer somebody the opportunity to come into a club with
several hundred people, to be able to eat, drink, take
that food to your seat, watch the show or watch

(56:13):
the game, go back and forth, be with your friends,
entertain your clients. It's a very different experience than buying
a ticket and sitting in a seat. And so what
we've observed is this is the trend, this is what
people want. We've done primary research, we spoke to people,
and so we want to give that experience to people.

(56:33):
And we have not invested. We're not doing this because
things are getting gold, because we want to give things
a facelift. We're doing this because we want to satisfy
the patterns of what we hear people are wanting. And
we believe in the notion of keeping everything fresh, of
being being leaders and thought and entertainment. And we're putting

(56:56):
our we're putting our money, you know, to work.

Speaker 11 (57:01):
I want to talk about the growth of women's basketball
and the WNBA. Randall had pointed out to Tim and
I that the Liberty were ranked the second most valuable
WNBA team four hundred and fifty million at least by Sportico.
Is it possible to get to one billion? And what
would that look like? Talk about like how we've gotten
here and where we're going.

Speaker 8 (57:23):
I think it's not just possible. I think it's highly likely.

Speaker 10 (57:27):
You think there's a race to get there. Look, we're
in sports.

Speaker 8 (57:32):
There's always a race, right.

Speaker 10 (57:35):
The Look, we don't, But I would say this.

Speaker 8 (57:39):
The race is to win another championship, to be a dynasty,
to give fans a great experience, to have the best players,
to take care of our players, and so on. That's
that's what the race is. Not to evaluation. You also

(57:59):
don't dictate the valuation. The valuation comes because you do
all these things right. But yes, I do think that
it will happen. I think it is you know, famous
last words. But it feels to me like it's straight
down the fairway when I look at I joined the
company three years ago. I have seen the average crowd
go from two thousands so much different times years ago,

(58:23):
from two thousand to a sellout. I have seen, you know,
I won't I won't labor all the all the key
performance indicators, but attendance, ticket, ticket prices, season ticket holders, sponsorships,
every single metric has gone up tens of percentages a year.

(58:50):
And and when you are at the arena, it's palatable.
A Liberty game is loud, it is a party, It
is a fun experience and everyone is invested, and there
are some things that you could you could just see,
you can you can feel.

Speaker 3 (59:05):
We're speaking with Sam's usman CEO Brooklyn Sports and Entertainment.
Also joining us Randall Williams, Bloomberg News Global Business of
a sports reporter, Sam. How is the consumer doing right
now based on ticket sales? Are you seeing any weakness,
any lack of demand in different events due to concerns
that the consumer has about parting with discretionary income. I mean,

(59:26):
there's nothing essentially more discretionary than what we're talking about here.

Speaker 8 (59:30):
Yeah, you know, it's interesting. We are we're in the
experience economy, right, Like when you think of people buying
products and services, they do that in order to save
time in order to gain efficiency. For us, it's the opposite.

Speaker 11 (59:44):
For us.

Speaker 8 (59:44):
People are giving us their time and giving us the
money their money in order to in order to gain
an experience. And so it's it's it's quite interesting. It's
it's in good times that people want to do it,
and it's actually in tough times people want to do
that as well. And so look, I don't exactly I

(01:00:05):
can't exactly measure the macro, but I can tell you
in the micro. If we look at attendance in concerts,
it is it is stronger than ever. If you look
at attendance in Brooklyn Nets and New York Liberty Games,
we are in the high ninety percentage. You know, when

(01:00:26):
you look at discretionary purchases off merchandise or food and
beverage and so on, if you look at ticket prices,
if I only had those to go by, I would
tell you that the economy is doing great.

Speaker 5 (01:00:41):
See.

Speaker 13 (01:00:41):
And one of the things that both you and Emily
mentioned was the growth of the WNBA. And I'm going
to ask you about these CBA negotiations, negotiations that are
going on, and I don't know if you can answer that,
but the players have said they want better salaries, better benefits,
increase retirement, all of these things. We haven't heard much
from the league. So from your vantage point, what do
you think is a fair deal from both sides? Because

(01:01:03):
you know these CBA negotiations go on once every decade and.

Speaker 3 (01:01:06):
We only have twenty seconds.

Speaker 8 (01:01:07):
Yeah, well, I won't use that because I that is
actually a topic that I that I should refrain from.
It's an active negotiation, and so I think we should
let the professionals, negotiator on the table a.

Speaker 3 (01:01:20):
Good place to end at. Sam Zusman, CEO of Brooklyn
Sports Entertainment, Randall Williams and Bloomberg News Global Business of
Sports reporter. This is BusinessWeek.

Speaker 2 (01:01:33):
You're listening to the Bloomberg Business Weekdaily podcast. Catch us
live weekday afternoons from two to five pm Eastern. Listen
on Applecarplay and Android Auto with the Bloomberg Business app,
or watch us live on YouTube.

Speaker 1 (01:01:47):
A recent most read story on the Bloomberg and at
Bloomberg dot Com that caught our attention highlighted the struggles
that some US small business owners are facing due to
volatile trade policies. It was about Robert Keeley, the owner
of Killey Electronics, who used his one point eighty three
million American Express Reward points almost two million to pay
an eleven thousand dollars tariff bill.

Speaker 3 (01:02:08):
For some, it may feel like they're only lifeline left.
Small business owners often lack the cash reserves, lobbying muscle,
or supply chain flexibility to absorb steep terrifikes or pivot production.

Speaker 1 (01:02:20):
One small US business owner with the global supply chain
is Steven Silver. He's chairman and CEO of the independent
family owned Steven Silver Fine Jewelry.

Speaker 14 (01:02:28):
I think that the tariffs have put a lot of
pressure on imports as Swiss watches, and yeah, that's an
interesting situations that they're having to deal with. We're having
to deal with as a company that's supporting twenty one
independent Swiss watch brands. So navigating that's been pretty interesting.
From the perspective of inventories that are hold held inside

(01:02:51):
the United States, those inventories have gotten more valuable because
the tariffs don't affect those. The interesting sidebar with red
arts to manufacturing, which is I think one of the
major purposes of these tariffs is we bring as a trade.
We bring in a lot of rough a lot of
cut gemstones, but they haven't made into anything yet, so

(01:03:14):
tariff on those products coming in we've never experienced before.
So I think you may see an elevated price point jump,
whether the consumers are forced to absorb that or not.
As a different story, but unless little modifications are made
to these tariffs to support us manufacturing in this country

(01:03:36):
with the loose goods that we bring in, you'll probably
see some jewelry pricing increases. Who knows, I mean It
really depends on how much the manufacturers are willing to
absorb in the process of delivering the product to the public.

Speaker 10 (01:03:50):
How much does it matter to you. I was in
Lamon in France a couple of weeks ago, and I
had the opportunity to sit down with Richard Meel, who makes,
you know, great watches and very expensive watches. I mean,
I don't know the exact prices, but we're talking about
three hundred thousand dollars riskwatches. And you know, for his
clients a ten percent bump doesn't matter very much if

(01:04:14):
they even have to raise the price that much.

Speaker 14 (01:04:16):
Yeah, I mean, Richard Meal is a company that we
started with when we first went into the independent watch
business about seven years ago. The way that these things
will be acted or reacted to is about what the
brand wants to absorb in the process of delivering product
to its consumers.

Speaker 10 (01:04:36):
And it's a very good point because they have I'm
guessing they have massive margins.

Speaker 14 (01:04:40):
Well they have margins, so to the degree that they
want to eat into that, they will in order to
support their business and their consumers.

Speaker 1 (01:04:48):
So tell us about your world, and I'm just curious
about what you are seeing I'm assuming you have, you know,
tell us about your typical client if it's a gamut
of you know, in terms of price points and what
it is telling you about the consumer right now.

Speaker 10 (01:05:04):
And you're dealing with also incredibly high end stuff, right
cashmere sapphires, pink diamonds, Richard Meal watches, so.

Speaker 14 (01:05:13):
Well, not Reshart Meal anymore, they went Mono brand and
we were eliminated. But but other brands on the level
of Reshard Meal or even finer, you know, some of
the brands like Groogle, Foresa and other important brands.

Speaker 1 (01:05:26):
Do you have one carrot diamond rings? You have you know,
multiple carrots, So like there is a range.

Speaker 10 (01:05:32):
So what are you seeing.

Speaker 14 (01:05:33):
Well, the consumers, as we discussed earlier, as we move
up into the to the different levels of consumer activity
and we start getting into the ultra high end attitude shift,
reasons to buy shift. A lot of our ultra high
net worth consumers are buying is storage of wealth. So
that points to you know, product like ultra rare pink diamonds,

(01:05:57):
blue diamonds, red diamonds. Some of the unique rare historical
pieces that we've dealt with over the years, like the
colon and blue diamond necklace, which we donated to our
National Gem Collection in twenty ten that sits in the Smithsonian.
You know, things like that, historical pieces that are real,
really true collectibles and investments or act like investments.

Speaker 10 (01:06:21):
But did you see I promised diamond? By the way,
I mean, the colon in for me has even more
significance because Rolls Royce actually named the SUV after this diamond.

Speaker 14 (01:06:33):
You know, we were actually in discussions with them about
when they were first coming out or with the concept
of the colony. We sat down with them and we
actually gave them a color chart of what the colon
in blue diamond color was and to see if they
wanted to match the color of the paint of the
colon in. That would be insane, would We Unfortunately didn't
do it with them, but it was an interesting discussion

(01:06:55):
to have with with Rolls Royce at that time.

Speaker 10 (01:06:57):
What a cool brush with history it is. I mean,
in two different ways. Can I ask about the lab
grown because to me this is okay. Obviously no one's
replacing a culon or a pink promise with a lab
grown diamond. But you point to you point out that
for a large swath of people, diamonds are more than jewelry.

(01:07:19):
They're a store of wealth.

Speaker 3 (01:07:20):
I have some.

Speaker 10 (01:07:21):
I have a very wealthy friend who gave his wife
a giant diamond and she immediately got a fake made
of it and put the real thing in a safety
deposit box, because that's just how that set rolls, you know.
But for the normal people among us, like for me,
I just want to get as much size as I
can to put on my wife's finger, right, I don't care.

Speaker 14 (01:07:43):
I'm sure she appreciates, yes.

Speaker 10 (01:07:45):
So, like, how do you see this debate between lab
grown and you know what I would have called blood diamonds,
But I don't think that's fair anymore.

Speaker 14 (01:07:53):
Well, the impact on our trade is still an evolution.
The last time something this massive happened to our trade
probably goes back to the time of Micking Moto inventing
the technology to culture appearl and it really impacted the
natural pearl market. This is a little different in the
context of the ability to measure the market. It will

(01:08:15):
define itself over time, I'm sure, but it looks like
to me anyway that the trend is more of a
mass market product that really impacts positively the average consumer.
That spends twenty five hundred to maybe set five six
seven thousand dollars to buy a piece of jewelry for
an anniversary or a special occasion. Instead of spending or

(01:08:40):
financing that purchase at twenty thirty cents on the dollar,
they can afford to just write a check and not
get into debt in the process of buying that product.
So I think for that market it's probably a great
tool because the product looks like a natural stone. It's
a synthetic diamond, absolute match to what nature produces, but

(01:09:03):
it's not in a laboratory.

Speaker 10 (01:09:05):
So but it will hold any value.

Speaker 14 (01:09:07):
Zero value at all, because the measure of value in
our world is what the secondary market wants to buy
that product back into the trade for. So if there's
no support there, which there is not, then it's sort
of the same thing as buying a T shirt. Once
you've used it, it's done. There is no value. The
trade won't recognize it as a secondhand purchase with value. However,

(01:09:31):
with the natural stone, it's a fully developed second mark
secondary market. The state jewelry has bought and sold every
day in massive volumes along with metals. So in the alternative,
again going back to the Mickey Moto experience, is there
is a market for mickeymotocultured pearls or cultured pearls, but

(01:09:51):
that's because they farm them. They actually it's a farming
process that does have the risk associated with not producing
the product. So is a farming product as the trade
recognizes a value. But it is definitely a different marketplace
than the natural pearl market. It's massively different. Natural pearls
and a big size can be worth millions of dollars

(01:10:13):
as a pearl, and nothing even comes near to that
with a single pearl in the culture cultured world.

Speaker 1 (01:10:21):
I am curious, Steven, because we talked with some folks
in the high end real estate and that when there
was the turmoil in the marketplace and we saw stock
sell off a lot, that people were pulling back from
buying property. And these are even wealthy, Like we talked
to high end real estate. Did you see any kind
of slow down amid the market volatility?

Speaker 14 (01:10:41):
Some Yeah, yeah, for sure there because we're also a
wholesale business as well as well as a retail business,
so we saw a lot of resistance slow down in
our wholesale side, you know, with the ultra high end,
they're they're very very smart consumers and where they see opportunity,
they'll take it. And buying something that they don't need

(01:11:04):
but want is a different thing that understanding that their
capital may be better suited for a dip in a market,
they'll put money into that versus a luxury item like
what we deal with in the long haul over a
long period of time. These rare collectibles are very very
strong though. They hold a very very strong position and

(01:11:27):
resistance to volatility is part of that. Interesting charts that
we develop and look at in our own world. What
is a pink diamond done in the last ten years?

Speaker 1 (01:11:38):
What has it done in the last time?

Speaker 14 (01:11:40):
Really interesting chart with very very little volatility. Depends on size, color, clarity,
cone of color. But the vivid pink category and intense
pink category has been a very very gradual increase over
the last twenty years. That has spun off amazing returns
for people that that buy them, and I believe, honestly

(01:12:02):
we'll consistently do that in the future because they're so rare.

Speaker 1 (01:12:05):
Have you seen the Missus Bezos diamond?

Speaker 5 (01:12:08):
I didn't know.

Speaker 1 (01:12:09):
It's I think like twenty thirty carrots.

Speaker 4 (01:12:11):
It's pretty wild.

Speaker 10 (01:12:13):
I want to ask about watches because you know, on
Wall Street, I think there may be some lack of creativity.
So the guy that makes you know his first ten
million is going to go out and buy something from
ap or Petech, Fhi Leap, but not necessarily Grooble Foresay

(01:12:34):
or mbn F. What are the most important indie brands
right now? For those that really know, and I'm not
one of those people, what are the ones that are
sought after so once?

Speaker 14 (01:12:47):
So this is a really interesting question because the what
I call the independent stables Rishard, Meil, ap Rolex. Those
are your three dominant big boy brands that dominate the
high end luxury watch Constantine, Paddocks of course, but Vacheon

(01:13:09):
is probably number five or six. I'm not sure the
top off the top of my head with the top
ten are, but these that I've mentioned are certainly in
the top four. Then you have this sector called independence,
but they're not usually big businesses doing big volume. But
that's where the innovation is, and that's where you see
the MBNF and this wonderful design and this really unique

(01:13:34):
quality the grooble Foray. These companies don't make a lot
of watches. They may make three hundred or four hundred max.
But the innovation, the time and the effort the finishing
on these watches is equal to or surpassing great cars
that are incredibly rich cars, right, very very expensive cars.

(01:13:57):
So that kind of engineering is the samekind of engineering
that goes into these independent watch brands. That's where the
innovation is. It's also points to our client in Silicon Valley.
This is a valley of innovation and has been for decades.

Speaker 10 (01:14:12):
So the this is why we see like Mark Zuckerberg
wearing the Google Forces only recently, right.

Speaker 1 (01:14:20):
I mean, you guys are in Menlo Park and I'm
just curious, you know, what would you tell us about
kind of to look on Valley today in terms of
based on the purchasing and what you're seeing.

Speaker 14 (01:14:32):
Well, we started in nineteen eighty, so we've seen pretty
much the entire evolution of the different technology companies that
have evolved. They're certainly different today. They're much bigger, and
they're much you know as they the.

Speaker 1 (01:14:46):
AI guys like watches and as much as everybody else.

Speaker 14 (01:14:50):
Absolutely. I mean, we've got twenty one watch brand sitting
at the Villa, which is our new home you know,
we built a thirty six thousand foot building just to
service the clientele. That is our local clientele.

Speaker 10 (01:15:04):
Who are the most famous. I mean, I'm sure you
can't divulge the names of your clients, but you know how.

Speaker 14 (01:15:08):
Many NDA's I've signed, So don't go.

Speaker 10 (01:15:11):
No, I get that, but some of them are open
about their hobby, right, So we know Mark Zuckerberg now
has just a pretty decent stable of watches. Who are
the most famous horological experts in you know, Silicon Valley
or Hollywood And.

Speaker 1 (01:15:27):
Just got about thirty forty second.

Speaker 14 (01:15:28):
All right, Well, you know I can't say names, but
I can tell you that the leaders of some of
the big tech companies that you're reporting on every day
of the week. So and also some of the most
important venture capital guys or I've been clients of ours
for forty fifty years. So so they love to buy watch, Matt.

Speaker 9 (01:15:45):
You know that they do.

Speaker 10 (01:15:46):
You just need to look at I love it.

Speaker 9 (01:15:47):
I love it.

Speaker 1 (01:15:48):
But Stephen, thank you so much, Thanks for coming by,
Thank you for having me. Yeah, a pleasure, Steven silver
chair the way, I.

Speaker 14 (01:15:54):
Want to make a quick chat out to enchant or uncharted. Yeah,
they were amazing Noah and and Michael and Michah. Yeah,
done such an amazing job.

Speaker 10 (01:16:04):
That was the event you did to the Hamptons.

Speaker 14 (01:16:05):
Unbelievable and we hosted at dinner by the Way for
them on the West Coast before they did.

Speaker 1 (01:16:10):
We'll catch up soon.

Speaker 11 (01:16:11):
I agree.

Speaker 1 (01:16:12):
It was like a whole different slice of life and
it was fun to bring it to our Bloomberg audience.
Steven Silver, thank you so much.

Speaker 2 (01:16:17):
This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live weekday
afternoons from two to five pm Eastern on Bloomberg dot com,
the iHeartRadio app, tune In, and the Bloomberg Business app.
You can also watch us live every weekday on YouTube

(01:16:38):
and always on the Bloomberg terminal.

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