Trump’s Fed Pick Draws Fire at Hearing; Live From Power Players New York

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.

President Donald Trump’s pick to fill a vacant seat on the Federal Reserve’s Board of Governors pushed back against Democratic concerns that he would merely do Trump’s bidding at the central bank, even as he acknowledged he would retain his White House job.

In his confirmation hearing before the Senate Banking Committee on Thursday, Stephen Miran said he intends to take an unpaid leave of absence from his post as chair of the White House Council of Economic Advisers if confirmed to the Fed for a term that is set to expire at the end of January.
Miran also reiterated his commitment to central bank independence and pledged to make decisions based on his own analysis. He added that a central bank’s most important job is preventing depressions and hyperinflation.

The Trump administration official, who said he has spent much of his career studying monetary policy, last year wrote a paper detailing numerous proposals to overhaul the Fed, including ways to undercut its independence.

Today's show features:

• Bloomberg TV and Radio International Economics & Policy Correspondent Mike McKee on the Stephen Miran Federal Reserve Confirmation Hearing
• Max Levchin, Co-Founder & CEO at Affirm, on earnings and the fintech landscape

Plus, Carol and Tim broadcast live as part of Power Players New York. They speak with:

• Derek Sprague, CEO, PGA of America, and Bloomberg News Texas Bureau Chief Julie Fine on the upcoming Ryder Cup and the mission to reunited the sport of golf
• Alex Rodriguez, Chairman & CEO of A-Rod Corp, and Bloomberg Originals Chief Correspondent Jason Kelly, on the newest season of “The Deal”

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.

Speaker 2 (00:08):
This is Bloomberg Business Week Daily.

Speaker 3 (00:11):
We're recording from the magazine that he glad with insight
all the people, companies and trends shaking today's complex economy, plus.

Speaker 1 (00:21):
Low business finance and tech news as it happens.

Speaker 3 (00:24):
The Bloomberg a Week Daily podcastcast with Carolsteek on Boomberg Radio.

Speaker 4 (00:32):
Hey listen, We got a big drop of economic news
on the US economy today, Applications for US unemployment benefits
rising to the highest SuDS June, adding to evidence that
the labor market here in the US is cooling yet
hiring plans falling to the weakest level for any August
on record in data from outplate placement firm Challenger, Gray
and Christmas going all the way back to two thousand
and nine, while intended job cuts rose and then ten.

(00:54):
We also got to read on the service side of
the US sector's US service providers provided expansion in August
at the fastest pace in six months, on the sharpest
acceleration in orders in nearly a year.

Speaker 5 (01:06):
That wasn't the only thing going on, No, it was
in President Trump's pick for FED Governor, Stephen Meyern up
on Capitol Hill today taking questions from members of Congress,
including when it comes to FED independence, I.

Speaker 6 (01:18):
Couldn't be more in agreement that independence of the Central
Bank is of paramount of importance for the economy, for
financial markets, for the long run stewardship of the country.
All of those are completely in complete accord with Look,
the President nominated me because I have policy views that
I suppose that he liked. If I'm confirmed to this role,

(01:42):
I will act independently as the Federal Reserve always does,
based on my own personal analysis of economic data, my
own personal analysis of the effects of economic policies upon
the economy, and act based on my judgment of my
judgment of the best economic policy possible.

Speaker 4 (01:59):
All Right, that was it in Trump's pick for FED
governor Stephen Myron up on Capitol Hill today. Bloomberg's Michael
McKee is also in the nation's capital there for the hearing.
He's Bloomberg TV and Radio international Economics and Policy correspondent,
joining us from that said news bureau by Bloomberg News
in DC.

Speaker 2 (02:15):
Hey, Mike, I got to.

Speaker 4 (02:16):
Ask you at a moment where it feels like there's
a lot that feels so important for the economist in you,
for the monetary policy person in you. We've got readings
on the labor market, on the US economy, the hearing
of Stephen Myron, We've got pressure on Lisa could Cook.
Continuing over at the FED, what's really so important right

(02:38):
now when it comes to the kind of economy and
the monetary policy outlook, Well.

Speaker 7 (02:44):
It depends on whether you're talking short term or long term.
Short term, the question is what is the Fed going
to do on September seventeenth, and today's EIGHTP number, which
you didn't mention yet, fifty four thousand lower than anticipated,
is a suggestion that the Fed is going to be
on track to cut rates because they've been concerned that
low employment and any rising unemployment would be assigned the

(03:07):
economy is slowing down that they'd want to get ahead
of by cutting rates. ADP hasn't always been completely reliable,
but the Fed, several FED officials have said they're looking
at that more closely these days because of the questions
about the revisions to the prior NFP reports. So on
a short term basis, I would say that and the

(03:28):
fact that in the ISM services number, the employment numbers
were still very weak. Longer term, it's the least a
Cook situation that worries people because if the judge, in
her effort to try to stay on the FED, says
she can be fired, or if an appeals court says
she can be fired and Trump immediately moves to replace

(03:48):
her even though her case has not been adjudicated yet,
then there's going to be some concern on Wall Street
about politicization.

Speaker 2 (03:56):
Of the FED.

Speaker 7 (03:58):
So we got the latest filing from the government in
the Cook case today. The judge could decide tonight, could
decide tomorrow, and that'll be the next important step for
the longer run.

Speaker 5 (04:09):
Is she working right now at the Federal Reserve? Mike,
do we know that? I know there was some confusion
about this last week and even early this week.

Speaker 7 (04:16):
It's our understanding that until the judge rules otherwise, she
is still employed by the FED, and she is still working,
although working from home, we understand. But she hasn't had
her job or her electronics taken away, so she can
still participate, and if the judge lets her, she would
be attending the September seventeenth meeting and voting it.

Speaker 5 (04:36):
If she doesn't attend, it. Can she still vote for
policy that day?

Speaker 7 (04:40):
No, you have to be there to vote. And the
thing about the Fed governor's is there's no alternate. If
a voting regional FED president can't make it, then there's
an alternate voter for them. But that would just be
one fewer vote. And the question is is Stephen Myron
going to be confirmed, because that would be one fewer
vote as well if he's not confirmed in time.

Speaker 8 (05:01):
All right, so let's go there.

Speaker 4 (05:02):
I mean, do you think Myron's going to be confirmed
and what will that mean in terms of the composition
of the Fed.

Speaker 2 (05:09):
He'll be confirmed.

Speaker 7 (05:09):
The President has said he wants him confirmed, and Senate
Republicans generally do what the president wants. The only question
is sort of technical, can they get him through on
through the floor given the calendar that they have. They
have a lot of nominations backed up and they'd have
to move some things around, but it probably is going
to happen. Now the question is what kind of reception

(05:30):
would he receive and what impact would he have. He
was not well received at all by Democrats today, who
pointed out the contradictions in his testimony that he said
he's going to stay on the CEA, even though he's
said nobody should go back to their government job for
four years after leaving the FED, and after he criticized
Leil Brainerd and Austin Goolsby for going from a democratic

(05:53):
administration to the FED, called that sinister. So on the
democratic side, he hasn't got a friends.

Speaker 5 (05:59):
And then in his.

Speaker 7 (06:01):
Report on reforms that should be made to the FED,
he not only criticized Brainerd, but he criticized Mary Daily
and Austin Goolsby. And so will they be very friendly
when he shows up?

Speaker 4 (06:12):
Can't wait for Thanksgiving dinner when they all get together
around the table to be warm and cozy.

Speaker 5 (06:18):
Just like I don't even know where to go from there.
I do want to talk a little bit more about
this hearing, though, Mike, and the idea of independence of
the Federal Reserve is certainly dominant in the hearing today,
and I'm wondering what the contradiction is, or maybe you
can explain the contradiction in saying that, like being independent
on a body while retaining a job at the White House,

(06:38):
how is that actually possible?

Speaker 7 (06:40):
I think that's a question that answers itself to him.
There's no real way to separate the two things. And
I don't think anybody, even if he didn't say he
was going to keep the job, was going to think
that he would be an independent voice. As he noted,
the President picked him because he has views that he likes.
And while he will bring his own views and be

(07:02):
independent in making his decisions, his views aligned with the presidents.
So he's going to be a reliable vote for a
rate cut. And it's really just that the idea that
he would stay on even in an unpaid role as
an employee of Donald Trump while he's on the Fed,
it's just kind of a blatant hipocrisy. But that's kind

(07:24):
of the way Washington's been working lately.

Speaker 5 (07:26):
Mike, what did you make about around the question and
answer portion that focused on the form former Federal Reserve
Chair Arthur Burns and the idea of FED independence and
stagflation and presidential involvement during Arthur Burns' tenure, and the
way that that Myron handled that line of questioning.

Speaker 7 (07:45):
Well, they were obviously trying to trap him into admitting
that because the FED was influenced by Richard Dixon in
nineteen seventy two and they kept rates too low for
too long that that would happen again, And of course
after seventy two we got the great inflation of the
nineteen seventies. Myron try to tap dance around it. I
wonder how much relevance it has anymore, because a lot

(08:08):
of the people who are on that Senate committee probably
weren't born then and so don't remember it.

Speaker 5 (08:13):
So at this point it's ancient history.

Speaker 7 (08:16):
It is a cautionary history that FED officials are very
aware of, but I'm not sure that scores a lot
of political points.

Speaker 4 (08:22):
All Right, We're going to leave it on that note. Hey,
Michael McKay, thank you so much. I really appreciate it.
As we get ready for that monthly jobs report out
at eight thirty am Wall Street time tomorrow, Mike, of course,
will be all over it with the team. He is
International Economics and Policy Corspond at Bloomberg TV and Radio.
I should point out that Fed Bank of New York
President John Williams has said his forecast is that it
will become appropriate to cut interest rates over time. Without

(08:45):
clarifying the timing or pace of such moves, we know
as head of the New York FED that voice is
certainly an important one.

Speaker 2 (08:52):
Stay with us.

Speaker 5 (08:52):
More from Bloomberg Business Week Daily coming up after this.

Speaker 3 (09:00):
If 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.

Speaker 2 (09:10):
App, or watch us live on YouTube.

Speaker 4 (09:16):
All right, well, people run in with tech Timber. They're
also running with buy now, Pay later. It seems to
be everywhere nowadays. Companies including a firm after pay Klarna,
have all bought brought installment payments into everyday life, while
big banks and tech firms are also now racing into
the space.

Speaker 8 (09:31):
It's getting a little crowded.

Speaker 4 (09:32):
So with the market growing so rapidly, there are obvious
concerns over whether BNPL is adding a new layer of
hidden leverage to the economy, giving online shoppers and alternative
to more traditional financing such as credit cards and bank loans.
Data bat BNPL usage. It's kind of limited, and those
firms have so far resisted sharing a lot of information.
But we wanted to know more, and this person, our

(09:54):
next guest, knows a lot about the space here to
talk about all of this great to have with us.
The founder and executive officer and the twenty nine billion
dollar market cap company a firm, Max Levchin, joining us today,
I believe from San Francisco.

Speaker 9 (10:08):
How are you.

Speaker 10 (10:10):
I'm great enjoying this nice, warm tech temper.

Speaker 2 (10:14):
It's a thing. It's a thing.

Speaker 8 (10:17):
You know, talk to us about.

Speaker 4 (10:18):
First of all, just big and broad, especially on a
day when we're getting a lot of economic data. We're
waiting for the monthly jobs report, trying to figure out
what's next in terms of the US economy. You see
a lot when it comes to what consumers are up to.
How would you describe the consumer today?

Speaker 10 (10:35):
You know, the affirm consumer. That is the folks that
we approve for transactions, and each transaction is separately underwritten,
so we do have a very discerning eye as we
underride these loans. They're been great, they are shopping. Demand
for our product is accelerating. We just posted another accelerating
fourth in a row quarter of cross merchandise sales. They're

(11:00):
doing really well. Payment is really strong, Credit is steady
to improving. So we lend to a huge percentage of
US population, So you could infer from that that US
consumer rit large is doing well as well, so I
think the rumors of the American device are greatly exaggerated.
That is, you know, that said, we continue to watch

(11:21):
every metric we can all the time, because that's what
our job is.

Speaker 5 (11:25):
Are those metrics stronger now, max than they were, say
a year ago?

Speaker 10 (11:31):
Again, from a firm's point of view, we really are
firing an old pistons. Our ability to serve folks has
improved about twenty percent year over year. That's measured in
transaction frequency. Our user based crew about you know, just
north of twenty percent as well. So consumers are joining us.
Our user active acquisition as accelerated for the sixth quarter

(11:55):
in a row. So there is a meaningful cycular shift
from credit cards to firm. So I think again, with
an our ecosystem, every metric looks very good and better
than last year.

Speaker 5 (12:06):
Can you talk a little bit about what transactions a
firm customers are using the payment system for. Are they
using it like they would use a credit card right now?
What's the typical transaction, what's the transaction size?

Speaker 10 (12:22):
That's a great question, and it's a little bit differentiated
between players. So I can only speak to us. The
average ticket for US is just under three hundred dollars.
That should tell you a lot. So everything from a
truly considered purchase like a nice bicycle maybe a couple
hundred dollars, all the way down to a large party
supply maybe a couple hundred dollars, that those are sort

(12:45):
of the book ends. We tend to believe that really
really low ticket items. You know, twenty dollars is just
too small am of an amount to finance with a firm,
So we have a notion of you know where we
start trying to tell our consumers, Hey, you know what,
this seems like a good idea to be a cash transaction,
but generally speaking, because the product we offer is just

(13:08):
so much better than credit cards or the end borrower,
we're very pro idea that a firm should be used
in place of credit cards, full stop. If you think
of it very quickly, it is an obvious idea. So
we don't charge late fees, we don't compound interest, we
don't do deferral or any of the sort of gimmicky
things that look too good to be true, because they
are too good to be true. So it is an

(13:29):
honest financial product that really helps the end borrower get
full grip on their finances and not get into trouble,
not get over their skis. So directionally, the more they
use a firm for everything, I think, the better off
the consumer is going to be. That's the current average
is two hundred and ninety seven dollars.

Speaker 4 (13:47):
I think, how often does somebody that miss a payment
are there late and then what happens as a result,
what kicks in?

Speaker 8 (13:53):
I'll be honest, I'm not a huge user.

Speaker 5 (13:55):
Well, I mean, you ever use it?

Speaker 8 (13:58):
I think I've used one of them, and I can't
remember once because I was curious about it, you know,
and I set.

Speaker 4 (14:03):
It up so things just got paid and it was
like three payments or because I was curious about it,
because we talk about it all the time.

Speaker 8 (14:08):
Here grew up where you could put stuff away, you know,
stuff on layaway. So it's interesting to see the evolution.

Speaker 4 (14:16):
But I am curious, Max, how often is it that
somebody is late and then the terms start to change and.

Speaker 2 (14:22):
You know, this is a business, right, So that's actually
thank you for that prompt.

Speaker 10 (14:25):
That is, let me try to make one thing.

Speaker 2 (14:27):
There's one thing I can.

Speaker 10 (14:28):
Make clear in this conversation. I just really want to
hammer this one home. Nothing will change. Terms will not change,
These will not appear, interest will not change. No dollar
amounts will change. If something happens and you can't make
your pay your bill on time, the fundamental promise of
affirm is what you see is what you get. When
you're borrowing five hundred dollars and you're committing to paying

(14:50):
let's say another twenty five dollars of interest. If you
cannot make it on time, it will still be five
hundred and twenty five dollars. It will not be a
penny more. If you prepay and pass early, that interest
amount will come down. So it is a profoundly pro
consumer product.

Speaker 2 (15:04):
That's it.

Speaker 10 (15:05):
I just I supposed to make that very very clear.
We are a better financial product. About ninety eight percent
of our consumers are never late, never, never intervolved, and
so it's fundamentally extremely extremely high probability of none of
that will ever happen to you if you're within the
firm ecosystem. When folks are delinquent to the fancy term

(15:27):
for late with their payment, we'll reach out to them.
We use all sorts of digital channels to get in
touch with them, will remind them. Vast majority of folks
that are late are actually what's called sloppy payers in
the industry, where they say, oh my god, I forgot
to set the autopay, thank you for using that feature
if you did, and they cure it, and so it goes.
And so that the reason we don't charge late thees

(15:48):
is because from folks where they really cannot something happen
and the illust their job or something happened, they're not
going to pay you any faster if they have no
means of paying you back. The ones that are just
stumbled somehow and forgot the reminder is the most you
need to do. You don't want to penalize them for
being forgetful.

Speaker 5 (16:06):
So what is the default rate.

Speaker 10 (16:10):
It's on the order of two percent plus.

Speaker 2 (16:12):
Remindus that's remarkable. Well, I think it's meaningfully lower.

Speaker 10 (16:16):
It's meaningfully lower. The credit cards, by the way, are
lower ticket items that trends below one percent. So just
to give you a set like the rumors of this
being a bad financial product, creating hidden leverage in the
system is like bad math and ridiculousness.

Speaker 5 (16:32):
So push back on that a little bit, but do
it through the explanation of the business model. Here because
I think a lot of people approach this product with
being informed about how credit cards work and the idea
that high interest high interest if you miss a payment
fees if you miss a payment. In a sense, the

(16:53):
risk is somehow put on a different party here Max,
and there's also buy in from the retailer who partners
with a firm. Just explain how this whole transaction works.

Speaker 2 (17:05):
Yeah, very simple.

Speaker 10 (17:08):
You typically find a firm at a point of sale
on any online and now progressively more offline merchants. You
will ask to use the product, so it's always an
explicit request to borrow. And we take great pride and
put a lot of technical emphasis on underwriting every transaction
individually so that we have the discretion to say, hey,

(17:28):
you're over extending yourself. These you know, two percent through
two and a half percent default rates don't come for nothing.
We do an enormous amount of work in this underwriting
engine that we build. So as you get approved through
your real time application, of course, what happens we pay
the merchant and you commit to paying us back over time,
and we always give you a menu of choices, could

(17:50):
be anything as short as for payments every two weeks
could be as long as thirty six months, once every month.
The rest of it happens more or less odically if
you opt into the autopay feature. If you don't, we
will send you a reminder and then you arrange for
repayment from your bank account typically, and that is it.

(18:11):
In our case. There is no compounding. The interest is
the interest expressed in dollars and that is what you
commit to. It will not go up independent of any
modifications to the schedule. There are no late fees in
our case. Again, this is we are unique or almost unique,
i think at this point in the industry by just
not charging any incrementalities at all. And so so this

(18:31):
really is the product where the cornerstone value is transparency.
We are entirely transparent with every participant in the ecosystem.
For merchants to consumers, everyone knows what they're getting into.
You get your bicycle or your couch or your putty
supply today, and you pay for it over time, and
you know exactly when the payment plan stops, and then
you're no longer in debt. It is a Arizona to

(18:52):
credit cards because when you use credit cards, which are
very conveedient, you don't have this extra approval step, So
you know, just drop the plastic and you go. You're
adding to this giant bucket of debt that just sits
there and revolves. The interest compounds into principle every month,
every week. Whatever it is you recruit in interest becomes
a part of the base that accrues interest on interest

(19:13):
on interest. That is why credit cards are so expensive.
The reason APR matters as a measure is because it
doesn't just measure interest you'll pay on a principle, it's
the interest you'll pay on the interest on the interest
and so on. The model we invented. The reason we
are so important, the reason people are coming to us, frankly,
is they don't have to understand exponential mathematics to figure

(19:34):
out what is the true endpoint of interest will be
whatever it is, we promise them that's exactly what the pay.

Speaker 5 (19:39):
We're speaking with Max Levchine's the founder and CEO of
a firm, the twenty nine billion dollar market cap fintech company. Also,
you'll notice Carelly keeps talking about bikes. He's a big syclist,
so that spends a lot of time on the bike.

Speaker 11 (19:52):
So is Tim.

Speaker 2 (19:52):
By the way, Max, Hey, oh, we know we follow
each other.

Speaker 8 (19:55):
I know you guys, did hey listen?

Speaker 4 (19:57):
One of the things I want to ask you. Your
stock is on a TA it's up fifty percent year
to date. It's surged as much as twenty five percent
intra day in response to your earnings, which you've been
talking about that came out late August. You had analysts,
several of them, raising the price targets on the stock.
What's the path to sustainable profitability? What do you need
to see happen to kind of keep the momentum going?

Speaker 10 (20:20):
We just need to keep doing exactly what we've been doing.
You know, the joke I make all the time as
we are an overnight success fifteen years into making profitability
is not an accident. We gave this date exactly a
year ago where we said, look, twelve months from now,
will be gap profitable. Two years ago we said, hey,
twenty four months from now, we expect to get profitable.

(20:41):
And so we've been on a journey that we've planned
years ago to deliver on all these milestones. And so
the celebration isn't of some clever overnight idea that we've had.
And finally, just you know, poked our head from the
unprofitable side of the fence. We've been planning to be profitable.
We've delivered on this plan. We have said publicly we

(21:03):
intend to be gap profitable from this point on. That
is not a thing you can decide last week and
delivered tomorrow. It's something that you build for a long
period of time. Takes discipline, takes execution, takes a great team,
which I'm lucky to have. And so yeah, I'm not
worried about that whatsoever. Whatever we commit to, we tend
to deliver well.

Speaker 4 (21:22):
Speaking of time, it's been a long time coming for
Klarna and it's IPO and it does plan that Here
in the United States, competition in the space is definitely
max picking up.

Speaker 8 (21:32):
They are specifically rapidly expanding here in the US.

Speaker 4 (21:36):
You've got Sezel that stock is up about seven thousand
percent less than two years.

Speaker 8 (21:41):
There's a lot going on.

Speaker 4 (21:42):
So how are you seeing the competitive landscape evolve?

Speaker 8 (21:47):
And what does that mean for you guys specifically at
a firm.

Speaker 10 (21:51):
You know, we're very happy doing our thing. As I
just extolled, for a little while, we are different. We
do our thing a little bit differently than the rest
of the industry. We have a very strong point of
view on what is and isn't moral, what isn't isn't
right for the consumer, for the merchant partners that we have,
you know, it's it's made great dividends for us and
our shareholders. So in that sense, we intend to change

(22:12):
absolutely nothing. Part of why maybe I spend less time
looking at the competition than one does in a competitive industry,
and this one is certainly very competitive. Is an aggregate
by now pay later is still just under one percent
of total US retail, and it's a worldwide phenomenon, and
US is actually quite behind. If you look at markets
like Australia and the Nordics, where by appailator is more mature,

(22:36):
they're the penetration into e commerce in the order of
twenty twenty five percent. I think in the US it's
you know, how much more polite seven percent maybe, and
if you expand it into offline, which there's no reason
why this doesn't work offline. In fact, we have a
card that's been growing extremely well, better than one hundred
percent year of a year just in the last quarters report.
You know, we're a fraction of a fraction. So the

(22:57):
opportunity to provide more honest financial products is you know,
I said it in my shareholder letter, tongue in cheek.
It rounds up to infinity. And so for now we're
not really running into each other in a hallways fighting
for that last same customer or merchant. I'm sure one
day we'll get to a point where it's so significant
as a part of US economy, where it becomes, you know,

(23:20):
a zero sum game. But even in that world, there's
a Visa to a MasterCard. And for now, I think
we're all just experiencing really good growth. And frankly, the
fact that the market now will support a couple of
large publicly traded companies, it's probably good thing that just
gives shareholders a sense for this. This has a long
way to go in terms of growth.

Speaker 5 (23:40):
Hey, Max, before we let you go, just thirty seconds
on crypto and stable coins and opinion piece this week
coming from Paul Davies of Bloomberg Opinion. He wrote that
stable coins and our opportunity for merchants and airlines to
recover costs from big banks and networks like Visa and MasterCard.
Is there a use for digital assets at a firm.

Speaker 10 (23:58):
You know, I think there are interesting opportunities around merchant settlement,
which is sort of I'm echoing what this piece is saying.
I'm not yet seeing consumer spending stable coins. They have
acquired intros and so as a back end mechanism. Stable
coins are very interesting and we're certainly looking at the
opportunities there on the consumer side. I think folks are

(24:19):
thinking in dollars and probably will continue to do so.

Speaker 4 (24:21):
All right, gott to leave it there, Hey, Max, thanks
for carving out some time for us. Max Levchin, founder
and chief executive officer of a firm. Max, of course,
just a great voice when it comes to what's going
on in the fintech space.

Speaker 5 (24:35):
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up after this.

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dollar global industry. We're bringing you influential voices from the
business behind sports to help you identify what is coming next.
And that's why our coverage of power players continues, joining
us for guests right here on set.

Speaker 8 (25:13):
All right, let's get to it. Derek Sprag is with us.

Speaker 4 (25:15):
He's CEO of PGA of America's in Bloomberg News Texas
bureau chief Julie Fine. They're just off their discussion up
on the big stage. Both of us here are power players.
I am curious in that conversation. What was it that, like,
I don't know, maybe surprised you in your conversation with Derek.

Speaker 12 (25:32):
I think the part that touched me the most is
when I asked him the most unique round of golf
he ever played, not on a financial standpoint, but the
most unique golf round of golf he ever played was
with his kids.

Speaker 9 (25:44):
Ah See, it's always fun playing with your kids.

Speaker 13 (25:47):
And you know, I don't get to do it as
offense I like, but it's always special when it happened.

Speaker 4 (25:52):
I have to say, one of seven kids, four brothers,
and a rite of passage was my brother's learning to
play golf.

Speaker 8 (25:57):
And I'm so sad that I never learned to play.

Speaker 9 (25:59):
With my dad. And it's never too late, Carol, never
too late, I know.

Speaker 8 (26:02):
Talk to us about the golf landscape.

Speaker 4 (26:04):
It continues to evolve and change and whether it's foreign investment,
a lot of things going on, new formats.

Speaker 8 (26:10):
Where do you guys fit into the overall ecosystem.

Speaker 13 (26:13):
Yeah, So we're the PGA of America, so commonly known
as the coaches of the game, the administrators of the game,
the club professionals. Right, there's sixteen thousand clubs in this country,
and we have PGA professionals at nearly ten thousand of
those clubs. So you'll see a PGA professional if you
go to a golf course, whether that's a public facility
or a private facility, you'll take lessons from our PGA members.

(26:34):
Versus the PGA Tour, which that's what you see on
television every week, the elite part of the game is
the PGA Tour. However, we work very closely with them
because a lot of our PGA members are coaches of
their tour players.

Speaker 5 (26:46):
Right during the pandemic, golf really exploded because it was
one of those sports that early on people realized they
could do and it was lower no risk. Have you
seen that growth continue.

Speaker 9 (26:57):
It's been incredible.

Speaker 13 (26:59):
You know, we haven't used social distancing word in a
long time, but golf PGA of America actually went to
bat during the pandemic to say because as states were
shutting down, we said, hey, golf is a safe sport.
And I think what we're seeing today, you know, five
years after the pandemic, is that growth continuing Because as
I told Julia earlier, families got together, right, they are

(27:19):
all living together, They got to play the sport together.
You got to play with your kids and your grandkids
in a safe environment outdoors and small groups, all the
things that social distancing lend itself to. And we've seen
that retention today. We have more golfers in the game.
We're up to like twenty eight million in this country.
Five hundred and fifty million rounds of golf were played
in twenty twenty four. It's just incredible growth since the pandemic.

Speaker 12 (27:43):
I mean, I think in terms of the financial aspect
of this game. What surprised me a little bit that
we discussed earlier is the global impact of it, and
what a difference global sponsors you're making the biggest changes
you've seen in Ryder Cup in that aspect.

Speaker 13 (27:59):
Yeah, this year Ryder Cup here in a few weeks
and in New York City's backyard out in Long Island
and beth Page is We have about two hundred and
eighty corporate partners in thirty of those from around the world.
We certainly have our worldwide partners at the PGA of
America for the Ryder Cup, but we have thirty partners
from Australia and Japan coming in. They're not even those

(28:19):
countries aren't involved with the Ryder Cup, but they're investing
in the Ryder Cup because it's a live sporting event,
one of the most epic sporting events in all of sports,
not just golf.

Speaker 4 (28:29):
How do you think of the role of the Rider's
Cup in the midst of what feels like a divided
golf world right now?

Speaker 8 (28:35):
How important is that?

Speaker 1 (28:37):
Yeah?

Speaker 13 (28:37):
I mean I think I think we're past that a
little bit, Carol. But it's certainly divided when you talk
about the Ryder Cup, because you know it's going to
be loud in Ruckus on Long Island. The Europeans are
coming in into our home home court, so to speak,
and as we call as Keegan calls that Air Captain
calls it, America's course now.

Speaker 9 (28:56):
Used to be New York's public course, but it's America's.

Speaker 13 (28:59):
Court that week, So yeah, it'll be divided that way,
the crowds will be divided. But I think the investment
in golf is now global, like I just mentioned, and
so many people golf is booming, not only in this country,
is booming globally now. More golf courses being built around
the world because of more golfers from around the world
playing that are playing over here in America. They go

(29:20):
back to their hometown and home countries and help start
the game there.

Speaker 12 (29:24):
Since the inception of the Live Tour. What we've also
seen boom is the persons. I mean, these players are
making a lot more money because of this really competing tour.

Speaker 13 (29:34):
What do you see the future of all this, Yeah,
I see it plateauing a little bit. You know, we
saw you know that was again we're different than the
PGA Tour, but it certainly increased our purses at our majors,
you know, all three of our majors, the KPMG, Women's PGA,
the Senior PGA, and the Men's pg which we'll be
holding at our home course at Frisco, Texas there. So, yeah,

(29:56):
the purses have grown, but I don't think they're going
to continue to grow at the rate they have in
the last few years.

Speaker 8 (30:02):
Might you see the Ryder Cup grow beyond the United States?

Speaker 13 (30:06):
Yeah, I mean we play it every other year, so
it's only in this country, and I think that's why
the demand is so high for this year's Ryder Cup.
One being in New York City metro market, it's.

Speaker 8 (30:15):
A great market to hold an investment.

Speaker 9 (30:16):
It sure is. And then we'll play it.

Speaker 13 (30:18):
It'll be in Ireland in twenty twenty seven, so it
goes back and forth every two years. Just to show
you the magnitude, a half a million people registered for
tickets for this year's Ryder Cup. Only fifty thousand a
day will be coming to it, but a half a million, right,
And then we had thirty thousand on the list of volunteer,
thirty thousand and say hey, we'll come and work, We'll
buy a uniform, we'll come out there and work. We'll

(30:39):
have about four thousand volunteers out there.

Speaker 8 (30:41):
But do you expand it beyond the US and Europe?

Speaker 13 (30:43):
No, I don't think so, because this had been goes
back to nineteen twenty seven. We're coming up on our
on hundredth anniversary in Ireland in two years, and I
don't see that changing at all.

Speaker 5 (30:52):
I'm wondering about accessibility to the sport here in the
US and how you grow that pipeline, especially for US players.
We just went to the US Open last week. We
broadcast from there every year, and every year we hear
from the USTA about their efforts to increase the ability
for kids to go out and play tennis, so sport
that oftentimes is associated with country club similar to golf.
What needs to be done in the US to increase
that pipeline for young Americans.

Speaker 13 (31:13):
Well, the PGA of America has been doing it now
for over ten years, and we have a program under
our PGA Reach Foundation umbrella called PGA Junior League. We
put these kids in jerseys with their names and numbers
on their backs. We'll have them out here at Ryder Cup,
so you'll see a little sprinkle of that cheering on
their favorite players or whatever. But we had last year
in twenty twenty four, we had seventy seven thousand juniors play.

(31:35):
So our pg of America golf professionals, they form these
teams at their facilities, they compete against other teams from
nearby facilities, and then we'll have a national championship actually
in Frisco here in a few weeks, so, I mean,
and that'll be televised and ESPN. So even junior sports
are seeing the big time on television.

Speaker 14 (31:56):
Right.

Speaker 13 (31:57):
So again our PGA of professionals that are hard at
growing the game, and PG Junior Leagu' is just one
of those great programs, probably the most successful program we've
ever had for growing the game.

Speaker 12 (32:05):
You have some really big names in golf right now.
You look at like a Scottie Scheffler from our neck
of the woods, Texas really actually is becoming home to
a lot of pro golfers now, but you look at him,
you look at Bryson d.

Speaker 9 (32:19):
Chambeau.

Speaker 12 (32:20):
Overall, you've got a lot of younger players. They're really
appealing to people via social media and different means, and
you've got a traditional base as well.

Speaker 8 (32:28):
So how do you marry that?

Speaker 13 (32:29):
Yeah, well, I think I think the younger generation there.
You know, they grew up a lot of them in
this video game world. So now technology has helped them
get in there. They got range finders and they're checking
the yardage on their watches and stuff.

Speaker 9 (32:43):
I mean, it just connects them to the game.

Speaker 13 (32:45):
And then when you look at the alternative off course
things like top golf in those type of venues, and
you got some right here in the city, right you
can go play golf inside the city here as some
of the venues here. So I think that's transferring to
whether you play nine holes or play ashore or play
eteen holes. All these alternative forms of golf have helped
elevate the game, especially with that demographic. And when they

(33:08):
go all in on something, and I think other CEOs
would tell you this, whether it's a certain product or
a certain sport, they're all.

Speaker 9 (33:14):
In that demographic.

Speaker 13 (33:16):
They go they're not doing the mile wide and inch deep,
They're going a mile deep in an inch wide.

Speaker 9 (33:21):
So they get onto sport a certain sport, they're staying
with it.

Speaker 4 (33:24):
But Derek, you know, like everyone is competing for our
eyeballs right now. There's so much content out there, and
certainly just even sports content. There's so many different choices.
So how do you guys kind of figure out how
to expand your audiences in a way and then still
stay kind of true to the traditional aspects of the game.

Speaker 9 (33:39):
Yeah, well, I think that's what the sport does.

Speaker 13 (33:41):
The multi generational part of our sport, where you have
you know, right here at Bloomberg you'll have some folks
that have worked here for a number of years. They're
mentoring the younger generation. They're taking them out to play golf.
A lot of business deals are done on the golf course.
So that's just what it's still like.

Speaker 8 (33:55):
Or is that just as sterious?

Speaker 10 (33:57):
No, No, it is.

Speaker 13 (33:59):
And when you think about it, as much as technology
is in this in this environment now at a lot
of the golf courses, it's great to put your phone
down and actually talk with someone and just think about
having a meeting for four or five hours. So on
a golf course, the playteen holes, you're playing for four
four and a half hours. You could be with your
boss for four four and a half hours, you could

(34:19):
be with a client for fore. You get to know
these people and it's a great human interaction. That's another
beautiful part of our sport is that you know, it's
not only traditional, but you have the technology infused with it.

Speaker 9 (34:30):
But then you get to spend time.

Speaker 13 (34:31):
And that's why I said earlier, just being able to
play with my kids and spend four or five hours
when it's great.

Speaker 8 (34:36):
Is it still a lot of guys though, playing? No,
we again, we've seen.

Speaker 13 (34:39):
In EFACT women's is the fastest growth of the sport
since the pandemic. More women have gotten in the sport,
not only for recreational Again, I think being like, hey,
when the families we're at home and they were shuttered
at home, they said, hey, I want to go out
and play too. A lot of women took up the
sport in the last five years. They've stayed in the

(35:00):
which is great. And then I hear I got a
lot of nieces and they're taking up the sport because
they know it's an important part not only for business
but for family. So it's it's wonderful to see and
that's our one of our proudest moments is to see
the sport grow with the youth and with women and
other people of underserved populations. We have a PGA works

(35:20):
part of our foundation, which really helps grow the game
for underserved communities, and we're trying to make PGA of
America is the entity that's trying to make the game
look like more like America.

Speaker 8 (35:32):
You just talked about the human aspect of this. I'm
now going to the non human aspects of this.

Speaker 9 (35:37):
Great segue.

Speaker 12 (35:39):
AI changes in the game and technology PGA of America
of course in Frisco, Texas.

Speaker 11 (35:44):
That's how we know each other.

Speaker 12 (35:45):
The technology is you take a shot and it tells
you everything that's wrong with it and what's right with it.
But I mean they have anything to dissect your game
that is there. What is the future of technology in
the game.

Speaker 9 (35:59):
It's just going to to grow.

Speaker 13 (36:00):
In fact, that's one of the first things I did
as the CEO when I got there, as I talked
to our head of education and I said, what are
we doing. We have all our associates that go through
our headquarters there and they learn the trade and become
a PGA professional with them, And I said, what are
we doing to teach them AI? Okay, not only would
with the launch monitors and all that that'll have AI
all factored in there, with the algorithms and all that,

(36:21):
but we're teaching our young associates how to use AI
in running their golf facilities.

Speaker 9 (36:26):
So whether that's doing a flyer that's generated.

Speaker 13 (36:29):
In a couple of minutes rather than a couple of hours,
or doing rounds forecasting for their budgets, or doing newsletters
for their club and using that AI technology to save
them time, make it more efficient, hopefully it'll look better
and then impress their bosses and their boards and their members.

Speaker 5 (36:45):
You know, one thing that we talked about again tennis
fresh on our mind as the US Open continues here
in New York and as we broadcast from there last week.
The average age of a tennis coach here in the
US is relatively old, and I'm wondering if you're seeing
similar challenges when it comes to coaching with golf, are
you able to get those younger coaches in there who
can spend their entire lifetime essentially teaching the game to others.

Speaker 13 (37:05):
Yeah, we have three career tracks really that sort of
like when they want to become a PGA member, which
direction you want to go? So we have club operations,
we have coaching, and we have executive management. The highest
growth is coaching, So we're not seeing that challenge. We're
seeing more young professionals want to get into coaching, and
I think it's well, I think one is a good lifestyle, right,

(37:27):
You're not Club operations can be challenging, right, You're coming
to the club at five in the morning, you might
be closing it at eleven o'clock at night. Where teaching
you know, generally is done in daylight hours. And I think,
you know, we've had such great success teaching players. You know,
Randy Smith is one of our PGA members and he's
teaching the number one player in the game, Scottie Scheffler,
And we've done a lot of great segments on that,

(37:48):
and I think that just inspires our young professionals to say,
I want to be like Randy Smith, and I want
to be one of the best teachers in the game.

Speaker 4 (37:55):
We're talking with Derek Sprague, he's the PGA of America.
Also with us is our Julie Fine, spirit chief here
at Bloomberg News.

Speaker 8 (38:03):
Things evolved, things change, and things are questioned about.

Speaker 4 (38:06):
I do remember these conversations we were having that like,
younger generation isn't playing golf?

Speaker 8 (38:10):
Is it just the pandemic that you think got people
more interested?

Speaker 13 (38:15):
Like, well, that certainly that was probably a jump starter.
But I you know, this sounds self serving, but I
look at some of the programs that were doing carol,
like PG Junior League. We've been doing that for ten years. Yeah,
and it's grown every year for ten years, right, and
you're getting seventy. So what happens again when you look
at the multi generational part of our sport.

Speaker 9 (38:33):
These kids play okay, and then their parents.

Speaker 13 (38:37):
Again, what's beautiful about the sport is they don't have
to sit on the sidelines like some other U sports.

Speaker 9 (38:41):
They don't have to be up in the stands. They
can participate with their kids.

Speaker 13 (38:44):
So all of a sudden, you take a couple of
children and then a couple parents start and the game
of golf grows. So, I mean, it's just I think
programs like that. And then we've got another great program
on our foundation for our veterans of this country called
PGA Hope, And these veterans that they're trying to reassimilate
back into civilian life, and our PGA coaches are helping

(39:05):
them take up the game building community and now they're
starting to play the sport. So I think all these
programs that we do at the national level at the
PGA America plus are thirty we have close to thirty
three thousand PGA professionals.

Speaker 9 (39:18):
One of the largest working sports organizations in the world.

Speaker 13 (39:20):
PGA America is so those members working at these you know,
fifteen thousand clubs nationwide are helping grow the game day
in and day out.

Speaker 8 (39:28):
Starting to pay it off. We've got one last question.
We're gonna let you got Julie wrap it up for.

Speaker 12 (39:32):
A perfect timing, and the last question is ten years.

Speaker 8 (39:35):
Where are we in the game of golf.

Speaker 13 (39:36):
Yeah, well, today we're one hundred and two billion dollar industry.
I see that growing probably by another twenty or thirty
billion dollars. I think the retention rate is going to continue,
and I think we're going to see instead of five
hundred and fifty million rounds of golf being play, we'll
probably see six hundred million rounds of golf in ten
years and just continue to grow this sport. Instead of
twenty eight million golfers, should probably have thirty two to

(39:58):
thirty four million golfers in ten in years time. So again,
all these all these programs are continuing to develop golfers,
and our thirty three thousand PG professionals are growing the
game nationwide, and I think all these programs will just
continue to add to the numbers and you know, economically
in golf, well.

Speaker 8 (40:16):
I guess said.

Speaker 4 (40:16):
I loved hitting golf balls at the driving range, like
it was just so much fun. It's just such a
part of us growing up.

Speaker 8 (40:22):
Thank you so much.

Speaker 9 (40:23):
You're welcome than what.

Speaker 8 (40:25):
Are you guys doing the show from Texas?

Speaker 5 (40:27):
Hey, anytime you all the time, will from Texas.

Speaker 11 (40:30):
Bring us downe lots of family in Texas.

Speaker 4 (40:32):
Love, We love to hell you Derek Spurg, Thank you
so much again, CEO PGA of American of course, our
thanks to our own Julie Fine, Texas Beer chief of
Bloomberg News.

Speaker 8 (40:41):
We're gonna put on a cowboy hat. We're gonna come down.

Speaker 2 (40:43):
I'm waiting stay with us.

Speaker 5 (40:45):
More from Bloomberg Business Week Daily coming up after this.

Speaker 3 (40:52):
If you're listening to the Bloomberg Business Weekdaily podcast, catch
us live weekday afternoons from two to five pm Eastern
on Apple car Play and Android Auto with the Bloomberg
Business app, or watch us live on YouTube.

Speaker 4 (41:07):
Soon to be up on the stage are our next
two guests, Alex Rodriguez, chairman that you have a Rod Corporation,
Blueberg Originals chief correspondent Jason Kelly joining us right now
on the newest season of the Deal and also just
to talk about power players. But first of all, Alex
have to tell you this is my former co host,
yeah before this one. Okay, so I feel your pain.

Speaker 2 (41:29):
Oh my gosh, wow, from good to great. Wow, you
have home field advantage here?

Speaker 5 (41:37):
How many how many seasons did you last with Jason?

Speaker 8 (41:41):
Four or five?

Speaker 9 (41:41):
No, like two and a half years.

Speaker 5 (41:43):
It's a third season.

Speaker 2 (41:44):
That it's a third season.

Speaker 5 (41:46):
The deal So.

Speaker 2 (41:47):
Alex, Oh my god.

Speaker 11 (41:48):
Now Alex and I's marriages lasted, long time marriage to Carol.

Speaker 2 (41:51):
This is amazing.

Speaker 8 (41:52):
Okay, now my world's two books. I don't well tell
us about the third season.

Speaker 4 (41:55):
You guys been working together for a while, how it
kind of has evolved, and how you think about who
you want to be talking about in this world.

Speaker 11 (42:02):
I mean it has evolved. I mean, we've had a
really fun week this week. This is teasing ahead till
later in the season. But you know, later on we're
gonna sit down upstairs with Justin Tuck. Obviously, former New
York Giant, won two Super Bowls. He now works he's
a managing director Goldman Sachs, which is amazing. But we've
had a crazy last couple of days because we and

(42:24):
you're gonna love this one, Carol, because I know you're
a fan of this person. The first was Erica Badon,
who is former Erica Nardini. She ran Barstool she had
some incredible stories. And then yesterday Robin oars On from Peloton,
who you and I interviewed back in the day. Yeah,
I mean Alex that was unbelievable.

Speaker 14 (42:44):
I mean, she's a force of nature and what a story.
Right to be a litigated lawyer, one of the top
ferms in New York. And then around twenty eleven says,
you know what, I'm gonna do a radical pivot and
she cold emails palettes On gets the job. And one
of the most things, I mean, there's so much to admire,
but the fact they've been to Moon with their stock
right over thirty billion dollar market cap and now is
you know, obviously a lot less than that, and she

(43:06):
has stuck it through and we asked her about it
and she gave a fantastic answer.

Speaker 5 (43:09):
That's my tease for Yeah.

Speaker 11 (43:11):
The other thing that she said, which is so funny.
So this is how I mean, I'm gonna tell a
little bit about behind the scenes, side baseball, inside baseball,
inside baseball, about the deal. And this is how I
know that I think this show is really working. Is
we we literally send each other voice memos this morning
saying it like independent of each other, saying my favorite
part of the interview with Robin rs On was this

(43:33):
thing that she said, and you'll have to wait to
listen to what it is, but that was kind of
a cool moment where we like, in this forty five
minute conversation, there was one thing that we're both like,
I'm going to use that in my day to day life.
And I do think one of the things that we've
started to achieve with this show is like sort of
a level of intimacy with our guests. You know, they
tend to open up.

Speaker 6 (43:53):
You know.

Speaker 11 (43:54):
We had in this most recent season, we had Bill
Belichick on, you know, a pretty rare business side interview.
You know, I think he told his stuff that you know,
he hadn't really talked about before, and really talked about
his approach to coaching, what it's like to sort of
take this new job in college sports.

Speaker 2 (44:13):
And so I mean we're having a ton of I mean,
this is fun.

Speaker 14 (44:16):
Another fun when with timely Wise, because you mentioned Time
is Mark Shapiro's that they rang the bell and they
took TKO public and he gave us some fascinating stories
going back to the Bob Ayger days and what he
was doing at ESPN, and he was a rising star
and now he's obviously the president of TKO and endeavor,
so so many great stories and now people are starting
to reach out to I was just saying, hey, can we.

Speaker 5 (44:37):
Be That's what I was gonna ask Alex. I mean,
now that it is a third season, you're not necessarily
having to knock down doors the way you guys did
just two or three years ago in order to do this.
How are you thinking differently about the conversations and who
you want on the program?

Speaker 14 (44:49):
Well, I think Jason reminded me yesterday that we've done
around fifty shows, so we're getting some reps, we're getting
out there.

Speaker 11 (44:56):
We're dropping one.

Speaker 14 (44:57):
Every week, which is the consistency is key and anything,
just like your job here, and I think we're thinking
bigger and we're thinking, you know, how do we think
outside the box? How do we storytell? But I think
Robin from PELOTSN was like the epitome of everything. Right,
you have a lawyer who's now in fitness, who's now
you know, one of the most influential fitness people in

(45:18):
sports in the country.

Speaker 11 (45:19):
Well, and I think you know, to building what Alex
is saying, I think one of the key things that
we think about with our show, and honestly, you know,
infuses everything we're doing today with Power Players is you know,
from the beginning, and this is why I think, you know,
Alex really brought into our shared vision of this is
we're talking about the intersection of business, sports and culture.
And I think, you know, there's a fair amount that's

(45:42):
being done around business and sports. You know, it's it's
undeniable what's happening there. But I think and we just
literally talked about this on a panel that I moderated
with Tom Garfigel from the Dolphins and Mike garrig Getti,
the CEO of Ares this amazing cultural impact that sports
has on everybody's lives at a time when we're so polarized,
we're so divided. You know, Alex is you know, very

(46:05):
involved on the board of the University of Miami. University
of Miami beating Notre Dame at hard Rock Stadium last
weekend was an unbelievable moment, Like in the broad culture.

Speaker 14 (46:17):
I mean, it really was incredible, and it had a
huge number on thirty million people, right, and that is
a huge number, right, And it's one of these things
especially after COVID. I think and Tom talked about it
in your last panel that people still want to come
together in a stadium. So I have seventy five thousand
people cheering on remember the old history, like bringing the
old days back for the University of Miami Convicts versus Catholics.

Speaker 2 (46:38):
Right, that's pretty awesome.

Speaker 9 (46:40):
And the fact that we won, I'm very very happy
about that.

Speaker 5 (46:42):
We're speaking, of course, is Alex Rodriguez, chairman and CEO
of A Rod Corp. Also Bloomberg Original's chief correspondent Jason
Kelly talking about the newest season of the Deal and More.
Is that culture around sport today? Is that a lot
different than it was when you played?

Speaker 14 (46:57):
Oh, there's no question about it. I mean, I think
Mike or Arraghetty was talking about, you know, ten fifteen
years ago, the ownership landscape looked a lot different, a
little bit you know his words, a little bit more
sleepy and I'm paraphrasing. And the sophistication with the newer
owners that have come in, with the ability and the
appetite to take risk while still being disciplined. But you know,

(47:19):
it takes a certain amount of you know, a cowboy
or a bit of a poker player to innovate and
keep pushing the envelope and making these assets remote. But
then it's all the businesses around, whether that's stadium networks.
You know, what that Atlanta Braves have done is incredible.
They did seventy five million dollars of extra cashtrow for
the team. I think that's the new model moving forward.

Speaker 9 (47:41):
Thank you for mentioning very now, but ran.

Speaker 5 (47:46):
Should know for everybody who doesn't already.

Speaker 11 (47:48):
But one thing you know that's so smart, so smart,
that's awful. But you know, I'll sort of toss right
back in the sense that I do think to answer
your question, Tim, one of the things that's also changed
is in these years that we've been doing this, Alex
has become the majority owner of an NBA and WNBA team,
and I do think being able to you know, we

(48:08):
talk a lot about, you know, in our partnership, sort
of the roles that we play in the conversations that
we have with our guests, and I think Alex's now
ability and curiosity and willingness to essentially say to people
whether it's Robin, whether it's Erica, whether it's Ted leonsis
who's been on our show, whether it's Belichick to be like, hey, listen,

(48:29):
I'm doing something new. We had superd on our show.
You know, WNBA legend, you know, to be able to say, like, listen,
I'm doing something new. Help me understand this new job.
I mean that I do think that sort of unlocked something.

Speaker 9 (48:41):
Do you agree for sure?

Speaker 14 (48:43):
Especially like they just handed us the keys about Colored
a few months ago, and it's fun for us to
think we just brought in a new CEO in Matthew Caldwell,
who was formerly at the Florida Panthers, worked for my
great friend mentor of Vinnie Viola, who's won two titles
back to back. No, it's just really a The other
thing that has changed, Jason, I think is now we've
brought institutional capital to the game. And if you think

(49:04):
about the ninety two professional sports team, when you include
the four major leagues NBA, NFL, NHL in Major League Baseball,
that changes the whole landscape of the ability to find
some liquidity, put that money to work and keep growing
these assets.

Speaker 4 (49:20):
You know, I think there was always a worry though,
and I post this question to both of you, of
a lot of money coming in gambling coming in what
that does to the sport?

Speaker 8 (49:27):
Hows it? Let me start with you, Alex, has it
changed sports overall? All this money?

Speaker 14 (49:33):
In additional question, there's a new data point that came
out that blowout games in the fourth quarter in the NFL,
we're doing better numbers in the second and first quarter,
and that's because of fantasy football and the interest level
that is now no longer about the score. The NFL
has found another hook to like if they needed one,
to bring in more fan base and become even stickier.

(49:55):
I thought that was fascinating because most people in the
fourth quarter, if it's a blowout, they're done good.

Speaker 5 (50:00):
Yeah, with the pins, it's complicated.

Speaker 2 (50:03):
It is complicated.

Speaker 14 (50:04):
Look, and there's regulations that you have to have justly
put guardrails around everything.

Speaker 8 (50:08):
But I mean for money in college sports.

Speaker 11 (50:09):
So I think so that's the one. So that's the
one that I think is probably. It was funny. I
was talking with the athletic director of Ohio State.

Speaker 5 (50:18):
Who is here on a panel or Dartment's athletic director,
draging just a few and what.

Speaker 11 (50:23):
I said to him, which he did not disagree with,
is what has happened in the business of college sports
over the past five years is the most radical thing
that has happened in any sport in the past one
hundred to two hundred years. I mean, there's no question, yeah,
because the entire business model has changed, the amount of
money coming in has changed, I mean even the idea.
So let's use University of Miami. University of Miami. The

(50:45):
reason they won that game almost, I mean not completely,
but a huge part of it is because the former
quarterback of the University of Georgia was done playing at Georgia,
he was headed for the NFL. Got a call from
the Universe to Miami and said, hey, bro, hey, Carson Beck,
we'll pay you four million dollars to come to University
of Miami, which was probably four x what he would

(51:07):
have made his first season in the NFL if he
got drafted.

Speaker 2 (51:10):
And then he goes down.

Speaker 11 (51:11):
Plays in front of a bigger crowd, in front of
you know, in a in a higher profile game, higher viewership,
you know, than than he would have gotten if he
had even been on the field in the NFL. That's
a radical different, Like, that's completely that.

Speaker 8 (51:26):
It's a game change, a good change.

Speaker 11 (51:30):
So I mean, listen, I think if you it depends
if you're an investor, there is certainly a lot of
investing to be done around it. I think there to
Alex's point about guardrails, there need to be new guardrails.

Speaker 3 (51:43):
You know.

Speaker 11 (51:44):
One of the things the athletic director said was like,
we are literally making this up as we go along,
which is crazy. I mean, like none of us can
do that in our jobs. And it's like I try,
as you know, but like we can't actually do it.

Speaker 14 (51:56):
Yeah, I mean imagine in any league without a collective
bargain agreement, yes, without a union, without what is the
exchange if you sign a player for five years guaranteed
he can't just go on to the you know, the
opponent over there, the rival. So I think especially with
the young kids, I mean, look, I have a junior,
a girl who's a junior, and a young lady that's
a junior at the University of Michigan, and I have

(52:17):
a senior this year in high school. And I couldn't
imagine one of my girls getting five, six, seven million
dollars today and they're not equipped for it right.

Speaker 11 (52:25):
Well, and the other thing, and and to your point,
Bill Belichick on our show said this is actually harder
than coaching in the NFL because it's free agency all
the time.

Speaker 8 (52:34):
So the kids can move around.

Speaker 2 (52:35):
Yeah, and they will move around here.

Speaker 5 (52:36):
There's rich about the portal with a colleague here. His
son can just log into a portal and go somewhere else.

Speaker 8 (52:43):
And he is going to move somewhere else.

Speaker 14 (52:44):
And if you look at some of the great coaches
that we've lost from these institutions, whether you go to Bills,
you go to Sabana, you go to Coach k you
go to coach Righte from Villanova, A tough name for Mike,
George soun buddy here here.

Speaker 2 (52:58):
But I think one of the as they're leaving is if.

Speaker 14 (53:01):
You scream at a kid, he's going, I'm out, I'm
going to George Sound, I'm going to overs in Miami.

Speaker 11 (53:05):
And that wasn't the case back then.

Speaker 5 (53:06):
So what does this do to the pipeline going into
the pros right now?

Speaker 11 (53:10):
I think the I think college football comes NFL junior Yeah,
and I think it really just becomes an extension. And
so you start to what it could do is you
could have more in some former fashion Carson Becks who
opt not to go to the pros because they're going
to make several million dollars, you know, playing in college
for an extra year, and and then I mean big

(53:31):
time football is going to just get bigger and bigger,
and college is going to be.

Speaker 10 (53:36):
A part of that.

Speaker 5 (53:36):
So Alex, I'll ask you the same question I was
asking you about sports gambling that net. Is this a
good thing?

Speaker 14 (53:42):
It's interesting, right because I still remember the days with
p Rose, right. I think the answer we don't know yet.
I think the pends for college sports forege or for
college sports for college sports, I'm not sure about that,
but I will tell you one correlation, if you know,
just to back up what Jason was saying, is you know,
you've never had companies stay private longer, whether it's stripe

(54:05):
or whether there's.

Speaker 5 (54:06):
Many of many examples.

Speaker 14 (54:07):
I think you're donn have an example of players staying
in college longer because they can develop. They can go
to the University of Miami for senior for four million dollars.
The kid over at Michigan the quarterback twelve twelve and
a half million dollars espres.

Speaker 2 (54:20):
So it's a different world.

Speaker 5 (54:21):
Yeah, so eight years in college and still no MD degree,
but they got a lot more money. Yeah, they got.

Speaker 8 (54:30):
We just got a few seconds. Lefter got a dream
guest that you still. Guys are like if they're listening.

Speaker 14 (54:38):
Real quick, Roger Fetter, Oh good one, uh, Roger Goodell.

Speaker 2 (54:44):
Oh good one. All right, a couple of Rogers.

Speaker 4 (54:47):
So Rogers, if you're listening, ready, well done, guys, thank you,
good luck on I Think Big Stage.

Speaker 8 (54:53):
Getting ready to talk to you about justin talk.

Speaker 9 (54:55):
All right, of course.

Speaker 4 (54:56):
Jason Kelly Chi corresponding Bloomberg Originals, Alex Rodriguez, chairman CEO
of A rod They are the co hosts of the Deal,
the third season.

Speaker 8 (55:03):
It is underway. You can find it wherever you download
your podcast.

Speaker 1 (55:06):
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(55:28):
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