September 20, 2025 • 38 mins
- Michael Casper, Bloomberg Intelligence US Equity Strategist, discusses Trump stating companies should report earnings every six months
- Michael Halen, Bloomberg Intelligence Senior Restaurant and Foodservice Analyst, discusses earnings from Cracker Barrel and Darden Restaurants.
- Diana Rosero Pena, Bloomberg Intelligence Consumer Staples Analyst, discusses General Mills earnings.
Craig Trudell, Bloomberg Global Autos Editor discusses Elon Musk’s buying $1 billion worth of Tesla shares.
- Steve Man, Bloomberg Intelligence Global Autos and Industrials Research Analyst, discusses Tesla Probe by US Safety Agency
Derrick Flakoll, BNEF Lead US Policy Analyst, discusses North America's biggest renewable energy conference.
- Damian Sassower, Chief EM Strategist with Bloomberg Intelligence and Co-Host of Bloomberg Business of Sports, discusses his research "The $2.65 Trillion Global Business of Sports Getting Bigger Fast.
Dimitra Kessenides, Bloomberg News Senior Editor, discusses the Best Business School Ranking by Bloomberg Businessweek
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
This is Bloomberg Intelligence with Scarletfoo and Paul Sweeney.
Speaker 2 (00:05):
How do you think the FED is looking at tariffs?
The uncertainty of terriffs.
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Lot of investors getting whip saled every day by news events.
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Breaking market headlines, and corporate news from across the globe.
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So people just too exuberant out there?
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You see some so called low quality stocks driving this
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Bloomberg Intelligence with Scarlettfoo and Paul Sweeney on Bloomberg Radio,
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On today's Bloomberg Intelligence Show, we dig inside the big
business stories impacting Wall Street and the global markets.
Speaker 4 (00:39):
Each and every week, we provide in depth research and
data on some of the two thousand companies and one
hundred and thirty industries our analysts cover worldwide.
Speaker 2 (00:47):
Today, we'll explain how the global business of sports is
getting bigger fast.
Speaker 4 (00:51):
Plus a look at the yearly Bloomberg BusinessWeek's ranking of
the best business schools in the country.
Speaker 2 (00:56):
But first, this week, President Trump pushed for a six
month reporting schedule for publicly traded US companies. This would
in the current quarterly format to quote, save money and
allow managers to focus on properly running their companies for more.
Speaker 4 (01:09):
Scarlet Foo and guest host Isabell Lee were joined by
Michael Casper, Bloomberg Intelligence US equity strategists. They first asked
Michael to break down what this would mean for earning season.
Speaker 5 (01:19):
Certainly has been an idea that's been floated for quite
some time among ESG circles, even if you go back
to the twenty sixteen election, I believe Hillary was floating
this idea. But it does have some validity in terms
of aligning you know, shareholder ideas with long term performance
and management incentives. Right, if management doesn't have to beat
a quarterly number every quarter, they can more easily focus
(01:43):
on the longer term, and that certainly has its merits.
But again, I don't think chan is the best analog
to make right.
Speaker 6 (01:49):
There, talk to us about the risks that semi annual
reporting could post, because why haven't we done it? Obviously,
I'm sure that our regulators and policymakers have way into
pros and cons.
Speaker 5 (01:58):
Yeah, so it's a it's less flow of information, right,
So you think about the quarterly reporting schedule, you're getting
information every three months. As an investor, you can process
that information more accurately priced things in the market, And
with a six month time frame, you lose a little
bit of that, right, And obviously I think consensus estimates
will be a little bit less let's say, accurate, because
they have to forecast a six month time period instead
(02:19):
of a three month time period. So that there are
some bumps in the road with adopting this, But again,
if it can align shareholder value with management centis, maybe
you do get a benefit out of it.
Speaker 3 (02:32):
Would CEOs necessarily like this, I mean, I'm sure everyone
wants to save time and save money that that was
something that the President cited as a benefit of moving
to six months reporting as opposed to three months, But
in general, is this something that CEOs would favor.
Speaker 5 (02:47):
I don't know if they would favor it. I think
they'd be pretty indifferent to it. It's still the same
scheme of you know, you've got a number every six months,
you've got to beat that number. It's just more aligning
that goal with with shareholder value, right, So I don't
know necessarily if they favor one over the other. They
might think their life is a little bit easier trying
to beat on a six month time frame than a
(03:07):
three month timeframe. But I don't know if it really
affects cost too much. As the President pointed.
Speaker 6 (03:12):
Out, do you think that under the current SEC regime
that this would actually be approved because to Scarlett's point earlier,
and we all know this wasn't the first time this
was floated, But yeah, maybe it will be approved.
Speaker 5 (03:25):
Maybe, I don't know. There's again, it's been a really
long push of this and back and forth. Should we
do six months? Should we do annually? Evens there's some
countries out there that do annual, and it really hasn't
gained a lot of traction. I think investors in the
US are really set on the quarterly reporting schedule. They
really look for those quarterly numbers to drive their analysis,
and so it's going to meet a lot of resistance
(03:47):
amongst the investor.
Speaker 3 (03:48):
Community, I think, yeah, especially as more retail investors are
now investing in the market too. They want to hear
from the companies directly, and a lot of those companies
are tailoring their commentary to this new investor class as well.
Not so much institutional investors, but the individual investors out there.
Speaker 5 (04:04):
Yeah, certainly you've got this huge flow of zero day
trading options and everybody trading around earnings events, especially in
the retail space. That's huge. So maybe amongst the constituency,
obviously they don't have as much of a lobbying voice
as you know, your big institutional investors, but amongst his constituency,
maybe there's a little bit of resistance there as well
from the retail community.
Speaker 6 (04:24):
Would there be a sector or industry that would benefit
from a semi annual report, good question.
Speaker 5 (04:29):
Oh yeah, I don't know necessarily, if I could pick
a sector that would benefit the most. I think tech
obviously has gained the most from the quarterly reporting schedule.
Speaker 7 (04:40):
Right.
Speaker 5 (04:40):
They've done a really good job of managing their earnings
and consistently beating and you know, we've seen it time
and time again. IBM was the bastion of this back
in the nineties and early two thousands financial engineering to
beat the quarterly number. It's since, I would argue it's
been Apple and Microsoft have been very good at it.
So I think Tech's been the biggest beneficiary, So maybe
the biggest.
Speaker 2 (05:00):
Our Thanks to Michael Casper Bloomberg Intelligence US equity strategist and.
Speaker 4 (05:03):
Speaking of earnings, Paul, we got results from Cracker Barrel
this week.
Speaker 2 (05:06):
The company offered sales guidance that missed expectation, showing the
brand is still dealing with a fallout from its controversial
and short lived logo change.
Speaker 4 (05:15):
For details, we caught up with BI restaurant analyst Michael Halen.
Speaker 8 (05:18):
They were recorded a great quarter. You know, Same Star
sales were up five point four percent in the restaurants,
a couple hundred basis points ahead of the street. But
sales have decelerated pretty significantly here, you know, since August
in the logo controversy. So you know, thought Julie Messino
did a great job. I think she's running a steady
(05:40):
ship right now. And you know, they're focusing on the
things that they've been focused on from the beginning, which
is providing better service and higher quality food at a
good price point. I would say it seems like they
may have sandbag guidance as well. They basically are extrapolating
current track grafic trends throughout the rest of the quarter.
(06:04):
You know, when second measure data that that Bloomberg owns
that that we follow is showing that traffic may be
stabilizing here. So I guess, I guess we'll see.
Speaker 2 (06:14):
All right, let's move on to what's going on with
our friends that darted.
Speaker 8 (06:18):
Yeah, you know Darden. It was an interesting quarter. Sales
were fantastic, but slightly below you know, very high expectations,
and the most interesting part of their report was that
their margins contracted, largely due to beef costs and Uber
fees because they did this one million free delivery promotions
(06:41):
supported by you know, Uber eats marketing dollars, right, and
so it actually made up five percent of sales, and
that's very impressive for something that's been instituted, you.
Speaker 9 (06:52):
Know, within a year.
Speaker 8 (06:53):
So, yeah, the margins, you know this, this company has
best in class margins. They've always protected their margins and
so seeing a same store sales gain that, you know,
a very strong same star sales gain without the margin expansion,
I think shocked some investors.
Speaker 4 (07:10):
So what are they planning to do to widen those margins?
I heard the portions might not be as big? Are
they looking at possibly raising prices on the menu.
Speaker 8 (07:20):
Well, they're going to raise prices, but not too aggressively.
So they're very careful about increasing their prices. A big
reason why we think they're outperforming is that they've increased
their prices a lot less than competitors since the pandemic, right,
and so they don't want to lose that advantage. So
they are going to raise prices this year, but it's
(07:42):
going to be modest and less than peers. You know,
you mentioned the smaller entrees. That's really a move to
boost traffic. So what they're doing is they're taking seven
of their popular entrees. They're making an additional, lighter menu
with those seven items. They're shrinking the portion and they're
(08:02):
lowering the price, and they're hoping that actually brings in
greater traffic with low income consumers. So shrinking the size
of the entrees isn't isn't a major plan in terms
of saving the margins. With the margins, it's going to
be you know, executing rights. That's what they're known for,
you know, consistently becoming more productive in their restaurants. That's
(08:25):
how they're going to try to fund this. You know,
there will be some slight price increases, and they mentioned
they could be a little bit more aggressive. If you know,
the higher beef prices remain stubborn.
Speaker 2 (08:36):
Thanks to bi's Michael Halen.
Speaker 4 (08:38):
We also got earnings from General Mills this week.
Speaker 2 (08:40):
The maker of curios reported a solid quarter but was
cautious about the road ahead.
Speaker 4 (08:44):
We spoke with b I Consumer Stables analyst Diana rosso Penya.
Speaker 10 (08:48):
They were mainly in line with expectations. It wasn't that
much of a surprise, but still, you know, the stock
is a little bit on the south side. People expected
better news than what they disclosed.
Speaker 4 (09:03):
Yeah, I mean North America sales came under pressure. What
was the drag there?
Speaker 10 (09:08):
It was mainly on volume. We expected volume declines but
not to the magnitude that they did. It was down
four percent on organic on the organic part, so obviously
consumers are still trading down. They are mentioning that, you know,
about eight brands of theirs. It was positive, but it's
(09:31):
still it wasn't enough for the whole segment two to
pull through.
Speaker 2 (09:35):
What are they doing or what are they saying about
tariffs and the impact on their costs versus maybe what
they're trying to pass along to customers.
Speaker 10 (09:42):
So they are upsetting some of the costs with cost savings.
It's usually going to be They expected to be about
one to two percent of cogs this year, which is
a little bit lower than for example, Campbell's expected they
expected around four percent.
Speaker 4 (09:58):
So you know, they're not there.
Speaker 10 (10:02):
They do not want to raise prices. They want to
be competitive because obviously volume growth is not happening.
Speaker 4 (10:09):
So yeah, I mean, they're getting competition from more folks.
I mean, on the one hand, they're benefiting from the
fact that more people are eating at home, right, but
yet when we're going to the supermarket, more people are
choosing those private label brands. What's their sort of you know,
plan of attack there.
Speaker 10 (10:23):
Yeah, so they're increase in marketing, They're they're hoping for innovation.
Speaker 7 (10:28):
Uh.
Speaker 10 (10:29):
They mentioned that twenty five percent of sales growth will
come in North America retail will probably come from innovation
this year. And this is what all everybody's trying to
get to the problem is. And that was mentioned on
the call as well, was that even the price increases
are not as significant as it used to be, they're
still high.
Speaker 4 (10:50):
So on a basket size.
Speaker 10 (10:53):
You're still paying a lot more than the used to
two years ago.
Speaker 2 (10:56):
Talk to us about store brands versus kind of the
the brands. We all grew up with. Here, tell us
how that's changed over time. Our store brands are becoming
a bigger, bigger part of the average cart.
Speaker 10 (11:07):
Yes, well, retailers are investing more on their private label.
It allows them to bring people into the store. Some
of the brands are have a cult following. I will say, hello,
Costco so exactly, so people are going to the store
to buy that particular brand. They're more profitable than national brands,
(11:29):
So obviously they're still incentive for retailers to deploy some
of that some of their own I think.
Speaker 4 (11:37):
Some people take it cheek to buy private label, right, Well,
we're at like a badge of honor.
Speaker 2 (11:42):
Certainly. I was shocked at the price differential.
Speaker 4 (11:45):
Yeah, because they have that pricing power right These stores
to you know, make their products a lot more attractive.
Really quick Blue Buffalo, it's their pet food. I was
surprised to see that that that was not a leader
for them.
Speaker 10 (11:56):
Yeah, so Wilderness was not is not doing as well
as they are hoping. Dog food in general has been
a headwind, not only for them but also for the
overall industry. Cat food seems to be the leading indicator here,
which is surprising, but.
Speaker 4 (12:16):
Cat food is outpacing dog food.
Speaker 10 (12:18):
Yes, correct, We have seen this for the past year.
There seems to be a growth in the cat population
more than the dog population.
Speaker 2 (12:26):
Thanks to Diana coming out.
Speaker 4 (12:29):
We look at Elon's purchase of one billion dollars worth
of Tesla shares.
Speaker 2 (12:34):
Listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth
research and data on two thousand companies and one hundred
and thirty industries.
Speaker 4 (12:40):
You can access Bloomberg Intelligence via bi go on the terminal.
I'm Alexis Christophers and now Paul Sweeney.
Speaker 9 (12:46):
This is Bloomberg.
Speaker 1 (12:51):
This is Bloomberg Intelligence with Scarlett Foo and Paul Sweeney
on Bloomberg Radio.
Speaker 2 (12:58):
I'm Paul Sweeney. Join this week by Alexis Christophers. We
moved to news from the ev giant Tesla. This week
Elon Musk purchased about one billion dollars worth of Tesla shares.
Speaker 4 (13:07):
And this comes after the billionaire was awarded one of
the biggest pay packages in corporate history. For details, host
Scarlett Foo and guest host Isabelle Lee were joined by
Bloomberg Global Autos editor Craig Trudell.
Speaker 11 (13:17):
There was an all out push with Robin Denholm the
chair of the company, speaking with us at Bloomberg Television,
speaking with you know, the New York Times, the Wall
Street Journal, all sorts of major news organizations about the
merits of this pay package that the board is proposing.
There's going to be a big shareholder vote in November
on handing you know, Musk, this this potentially up to
(13:41):
one trillion dollars worth of stock. There's a lot of
caveats all that that Musk would have to sort of
you know, pull a rabbit out of the hat again
after you know, doing so after a twenty eighteen pay
package where the board laid out out all these really
ambitious you know, market value and performance milestones. Musk, you know,
(14:02):
at that time it was kind of perceived as this
moonshot pay package. He proceeded to knock them all out,
and they're now calling this next pay package a mark
shot pay package. So, you know, I think there's this
This is all sort of part of a piece, right
of trying to get investors to sort of, you know,
focus on you know, far out there targets objectives from
(14:26):
Musks that would make shareholders a whole lot of money.
And it comes amid you know, real signs of stress
for the core here and now business for Tesla, where
their sales have just really struggled this year and there
haven't really been signs of of sort of meaningful change
in that trend even into this quarter.
Speaker 3 (14:44):
Right, So this will properly motivate him. I'm so glad
you brought up the twenty eighteen pay package and some
of the moonshot milestones that laid out for Elon Musk.
What was the most I don't want to use the
word outrageous, but the most ambitious of those milestones, And
did he s each and every one of them?
Speaker 11 (15:01):
Yeah, I mean in terms of the milestones there, I
mean just even the market cap figures. I think you know,
when when they were laid out, you know, it was
it was just sort of unfathomable that, you know, a
car company could be, you know, a trillion dollar company,
and you know, give give the guy credit. He went
out there and made it happen. You know. I think
(15:22):
Tesla now is trying to sort of, you know, incentivize
him to turn Tesla into a company that is many
multiples of even the VIDIA, the most valuable company in
the world in the here and now, and yet you know,
the sort of path to getting there is really uncertain
because you know, you've heard Musk make these pitches about
(15:44):
robotaxis and about humanoid robots. But you know, he is
a long way from accomplishing some of these new objectives
that the board has set for him.
Speaker 6 (15:53):
This must buying shares personally, is governance concerns or could
it even actually reinforce skepticism about how closely Tesla's board
is aligned with his self interest.
Speaker 11 (16:04):
Generally, whenever a CEO or an insider of a company
is buying shares, that's taken as a good thing and
not necessarily you know, something to look at skins at
from a corporate governance perspective. It does, however, I think
it's worth sort of you know, thinking about this billion
dollar purchase and context. This is a guy who's you know,
sort of you know, a billion dollars can be found
(16:26):
in his couch cushions, right he is is the top
person on the Bloomberg Billionaire's Index. He's worth about you know,
four hundred and twenty billion dollars at the moment, and
so you know just how meaningful this is. With any
other CEO, you would look at a billion dollar Stoft
purchase and maybe take you know, take real note of
(16:46):
that with Musk, Is it that huge a show of confidence?
Maybe not in the context of, you know, just how
much wealth he has.
Speaker 2 (16:54):
Our thanks to Craig Drudell, Bloomberg Global Autos Editor.
Speaker 4 (16:56):
Keeping with Tesla, we're going to move now to door safety.
Speaker 2 (17:00):
This week, US auto safety regulators open an investigation into
whether Tesla door handles are defective.
Speaker 4 (17:05):
And this comes after a Bloomberg exclusive saying NHTSA received
complaints that Tesla's design features like the door handles are
confusing occupants and first responders.
Speaker 2 (17:14):
For more, Scarlett Fille and Stacey Vandock Smith were joined
by Steve Man Bloomberg Intelligence, Global Autos and Industrials Research Channels.
Speaker 12 (17:20):
Well, it is a very serious situations, serious safety situation. Now,
first of all, there is a manual release from the
interior of the vehicle. But the safety issue is that
you can't manually override the electronics and open the door
from the outside. Now, this is an issue that's I'm
(17:42):
plaguing the whole industry. It's not just Tesla, okay, and
you know there's there's a number of automakers have solved
the issue, and I think Tesla does need to solve
this issue because you know, you know, people have died
because of this problem. Here, I think from the investor's perspective,
(18:02):
there is a solution. There is a number of vehicles.
For example, the Aldi they have actually solved that issue,
and they they solved it by you know, having a
double pull on the latch to actually open the vehicle manually.
So I think from an investor perspective, it is an issue.
It needs to be solved, and it's solvable. As you know,
(18:23):
the trillion dollar pay package and uh and the reieration
of the company moving towards AI is really getting the
investor very excited. The robo taxi is rolling out, apparently
the extended the model Y is selling really well in China.
So and then in Europe, where we saw a lot
(18:45):
of decline in ev sales seems to be ticking up.
Speaker 3 (18:48):
But the pay package rewards Elon Musk for thinking really big,
not dealing with how to unlock car doors. In the
event of some kind of problem, you say that Audi
has solved this, Are Tesla engineers going to take their
queue from Audi?
Speaker 12 (19:03):
Possibly? Really? Yeah, I mean it's it's it's important. It's
important that they solve this because Tesla, when they roll
out the robo taxi, safety is an important issue for them,
and it's an important issue not just for Tesla, I
think for the whole industry, and it's a reputation that
they're trying to build, especially you know they're they try
(19:24):
to roll out robo taxi and you know, they want
to project themselves as a safe automaker. So I think
it's going to be a priority list for for Elon
Musk and the rest of the organization there.
Speaker 13 (19:37):
It does also seem that that people are feeling quite
optimistic about this stock, but also there's there does seem
to be a liability issue in addition to a need
to solve this problem issue. Is that at all concern?
Speaker 7 (19:51):
Yeah, it is.
Speaker 12 (19:52):
It is a liability and I wouldn't be surprised that,
you know, there's going to be other legal issue that
that come up. I think from an investor perspective, this
is normal. Business recalls are normal and there are other
safety issues that has been recall not just at Tesla,
(20:12):
but and other automakers. So I think the investor are
taking this. I don't want to say lightly, but it's
normal business that we're going to get over this.
Speaker 3 (20:25):
It's a work in progress. Yes, are there other safety
issues in particular that Tesla needs to focus on pay
attention to that could, if left unresolved, could become legal
liability issues.
Speaker 12 (20:37):
Robotaxi there's still a safety driver sitting on a passenger
seat pretty much on every Robotaxi. I think there is
discussions of taking the safety driver out at the end
of the year, but I think they need to tread
very very carefully, especially for Tesla. It's a high profile company.
(20:57):
Anything negative is going to damage the reputation, and so
if they don't take up the safety driver at the
end of year, I wouldn't be surprised. I think they
do need to take it one step at a time
and make sure everything goes well before they do a
full launch without the safety driver.
Speaker 2 (21:16):
Our thanks to Steve Mann Bloomberg Intelligence, the global autos
and industrials research analysts, and.
Speaker 4 (21:20):
Each week we look at research from Bloomberg n EF
previously known as New Energy Finance.
Speaker 2 (21:25):
They're the team at Bloomberg that tracks and analyzes the
energy transition from commodities to power, transport, industries, buildings, and
agricultural sectors. This week, look that data center Demand and
R Plus north America's biggest renewable energy conference.
Speaker 4 (21:39):
For more, host Scarlett Food and guest hosts Isabelle Lee
were joined by Derek flackl BNEF, lead US policy analyst.
Speaker 14 (21:46):
Ri E Plus and Real Energy Plus is one of
the biggest conferences in North America. You see battery manufacturers,
transform manufacturers, energy storage manufacturers from all over the world
hawking their wares, and basically what everybody is trying to
do is rush to build, rush to safe harbor in
order to get legal compliance, to get tax credits in
the US government before rules change at the end of
the year. Now, as a reminder, those who are following
(22:07):
the Trump administration will recall the one big Beautiful bill,
a big budget act passed to the middle of the
year that has substantial changes for the way that you
can claim tax credits. If you're a window solar project,
you have to get under construction by a certain deadline
or you face an even harder cut off or when
your project can enter service, and at the beginning of
next year, suddenly you've gotten new foreign entity of concern
rules that could make you in eligible for tax credits
(22:29):
based on your exposure to mostly Chinese firms, whether through
corporate ownership, through supply chains, or through intellectual property and
other agreements. You're seeing firms restructure themselves in order to
avoid getting hit by those rules. You're seeing developers build
up massive stocks of solar and energy storage in order
to try and have equipment that allows them to claim
(22:51):
those credits before the rules come into effect. And you
also have massive growth in US battery factories and new
players entering the market to try and ser more domestic demand.
So you see this combination of a rush with the
possibility of a cliff afterwards. And I think everybody is
waiting for new rules to come out to provide some
clarity on exactly how much of the market can survive
(23:12):
the shift.
Speaker 3 (23:12):
How anxious were the companies and the executives at this
event because, as you mentioned, they are moving quickly because
the rules could change on them. The goalposts could change
at any point. What is the one certainty that they
have in operating through this uncertainty.
Speaker 14 (23:30):
I think the one certainty that they have besides that
more change is coming, is that there is going to
be load growth in the grid as a kind of
tailwind supporting the market in phase of other headwinds. Right,
we all know that data centers, among other applications like
new manufacturing and electrification, are causing electricity demand to rise
for the first time in the US in about two decades,
and at very fast, kind of chunky rates. So that
(23:53):
in turn means that electricity prices are going to have
to go up, especially given that the tax credits that
were sort of subing new power build are going away
or at least being severely reduced. That in turn is
going to make the economic case work out for more projects.
But that is filled with uncertainties in and of itself. Right,
you have different utility markets, different states trying to change
(24:15):
the way that power is paid for by large load
customers like data centers, and where the cost falls, how
many projects get built, how much public utility comissions allow
given the cost increases that most rate payers are going
to see. That's a source of uncertainty even within that certainty,
And so you see at riplus there was a lot
of talk of virtual power plants or special timing on
(24:37):
electric vehicle charging, anything to sort of keep the electricity
system from being overbuilt because as a reminder, way the
electricity system is structured is for the hottest and coldest
days of the year, when there's the largest amount of
electricity demand. A huge amount of cost is driven by that,
and there's extra capacity that goes unused. A lot of
the time. People are trying to get creative about how
(24:58):
you use more capacity it's already on the grid to
prevent things from getting more expensive for customers, or if
you do need to build new stuff, basically putting those
costs on two data centers themselves. Nevertheless, there is still
a key tailwind in the face of this policy uncertainty.
It's just a question of what that actually means for
every other customer.
Speaker 2 (25:16):
Thanks to Derek Flack will be n EF lead at
US Policy Analyst.
Speaker 4 (25:19):
Coming up, we look at how the global sports industry
is huge and growing rapidly.
Speaker 2 (25:23):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries.
Speaker 4 (25:30):
You can access Bloomberg Intelligence via Big on the terminal.
I'm Alexis Christoffers and I'm Paul Sweeney.
Speaker 2 (25:35):
This is Bloomberg.
Speaker 15 (25:41):
As veterans We're no strangers to helping others.
Speaker 7 (25:45):
It's what we were taught, trained and told to do.
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Speaker 1 (26:40):
This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney
on Bloomberg Radio.
Speaker 2 (26:47):
Paul Sweeney joined this week by Alexis Christopher's. Franchise valuations
are surging across the two point sixty five trillion dollar
global sports industry, with three year analyzed growth rates running
at it double digit pace across the majors.
Speaker 4 (27:00):
A loosening of ownership restrictions is driving an influx of
institutional capital into professional sports franchises, enabling access to a
deeper pool of potential investors.
Speaker 2 (27:10):
We broke down the numbers with BI analysts and Business
of Sports co hosts Damian Sasauer.
Speaker 16 (27:14):
Two point six five trillion is revenue generated or expected
revenue to be generated just this year alone from the
global business of sports. So let's put some color around it,
and really it's everything from the sixty billion dollars a
year that's generated from METIA rights, the thirty billion dollars
in advertising spend. But if you want to take that
two point six five trillion and it's recreational vehicles, it's
a parrel. It's everything. What we focus on is fan engagement,
(27:36):
and fan engagement is roughly seven hundred and fifty billion
in revenue generator per year, and there's no better mechanism
to take advantage of that segment than to own a
professional sports team.
Speaker 11 (27:46):
But you cannot.
Speaker 16 (27:46):
Everyone can own one, right they're privately listed or I'm sorry,
they're not publicly listed. They're private entities. You just can't
invest in them easily. So together with Brian Dougherty, get
the Raganathan, Kevin Niar and the whole team here at BI,
we came up with some way is that you know,
your everyday investor might be able to take advantage of
the opportunity set in the global business of sports. And
we wrote a huge research report on it and it's
(28:08):
really good.
Speaker 6 (28:09):
We did watch your twelve minutes segment and then you
said that the difference is the sports industry has limited
public access.
Speaker 17 (28:15):
Is that for the better?
Speaker 16 (28:17):
So it's changing, So the rules changes, specifically with regard
to private equity investment in the NFL. I mean the
NFL is first among equals. I mean their national media
deal is eleven years, one hundred and ten billion, something
along those lines. It's twelve billion and average annual value
per team. It dominates professional sports. But really, at the
end of the day, you know what you are seeing
here from some of the recent transactions that have taken
(28:38):
place in the private space. Talking the Philadelphia Eagles, the
Buffalo Bills, a lot of these teams have sold small
minority interests in their teams to private equity. It's driven
the entire the entire universe higher so to put some
some numbers around it, since year end alone, the average
NFL team has gone up by thirty five percent in valuation.
(28:59):
So the top twenty five teams across all of professional
sports I'm including international sports like soccer, the NFL now
comprises twenty two of the top twenty five slots alone,
led by the Dallas Cowboys of course, but the Jets
are up there. So yeah, no, I mean like it
used to have a sparring of the yeah, right, despite
their best effort, Scarlett, but you know, used to have
FC Barcelona, Real Madrid, you have, you know, some baseball
(29:20):
teams like the Yankees, Dodgers in Red Sox that used
to be up there, and a lot of them have
kind of fallen back due to the fact that private
equity is now and allowed to invest in the NFL.
Speaker 3 (29:29):
Okay, I mean private equity being allowed to invest in
the NFL was definitely a watershed moment, but private equity
was allowed to invest in European football clubs for a
lot longer before.
Speaker 15 (29:38):
We're different sport, yeah.
Speaker 7 (29:39):
Very different sport.
Speaker 3 (29:40):
But I'm curious in terms of the breakdown of that
two point sixty five trillion dollar number, how much of
that is tied to the NFL. How much of that
is tied to things like European soccer.
Speaker 16 (29:49):
Well, I mean it's a much smaller percentage than that, right,
because I mean that two point six to five trillion
that's generated a year. I mean, again, it has everything
to do with recreational vehicles, the footwear in a parrel.
But if you're just talking about a sports team and
how they generate their money, it's just really national media
rights or local sports media rights, and it's gate receipts primarily,
you know, ticketing, parking concessions, the things that you pay
(30:10):
for when you go to an event. Right, So you know,
if you just want to talk about gate receipts, I
mean one hundred and sixty two game schedule for the
Major League Baseball, they dominate in gate receipts, but in
national media rights, which is the real animal that everyone's
chasing right now. You hear about the NBA's new media
rights deal F one UFC. The Major League Baseball just
did something new there as well. You know, it's the NFL.
(30:30):
I mean, the NFL is first among equals and national
media deals. It represents seventy five percent of every team's
average annual value revenue that's generated every year. So yeah,
you know, I mean, you know, these national media deals
are huge, and now that the NBA just did its
big deal, we expect that, you know, come, I believe
twenty twenty eight, Scarlet, the NFL is going to re up.
It has the ability to buy out of its existing
(30:53):
contract and renegotiate it, and it definitely is going to
do that. And I think that's what's commanding a lot
of these valuations because in specifically private equity investors, they
see this and they want to take.
Speaker 9 (31:03):
Advantage of it.
Speaker 6 (31:03):
Can you talk about the revenue mix, because it varies
across major leagues. I'm looking at this really pretty table
you have for NFL, the biggest driver is national media.
Speaker 2 (31:11):
Yep.
Speaker 6 (31:11):
For NHL, and I'm eyeballing here, it's ticket sales and
it seems like concessions slash parking. Who would have thought
is kind of a significant chunk across all of them.
What do you think will be the single biggest driver
or is it really going to be different?
Speaker 16 (31:23):
Well, that's only because the average franchise value to revenue
multiple for the NHL is just seven point seven times.
I mean, in the NFL's case, it's twelve and a
half times.
Speaker 3 (31:32):
NFL isn't a league of it, nothing else even compares, correct.
Speaker 16 (31:36):
I mean, but you might argue, I mean, look, despite
the fact that the NHL generates you know, call it,
I don't know, two billion dollars in revenue per year
on average, you know, it's still it's multiple still smaller
than that of Major League Soccer, which generates much less.
And again that just has to do with the fact
that you have all these MLS valuations now on the
back of you know, some great European players like Messi
(31:57):
who are now coming to play in places like Miami.
Just try up a lot of these valuations and so yeah,
you know, I mean, you know, we're still in early days.
But really it's the entrance of institutional capital, Isabelle, that's
really driving everything higher. You know, for the first time ever,
you know, institutional investors are gaining access to these sports
teams and they are looking to you know, get a
(32:18):
high return on investment from them. And just to be
very clear, you mentioned soccer before, because of relegation on
all these things. In soccer, in the fact that there's
no salary cap is very very difficult to extract a
profit from owning a EPL team, a European Premier League team,
whereas the salary cap allows for you know, I guess
better profit generation in the US. And so I think
(32:38):
that's one element to why you're seeing a lot of
the evaluations for these real Madrid FC, Barcelona come off
relative to the NFL.
Speaker 3 (32:45):
So owning a European soccer club is more about bragging
rights than actually making money. Is that Is that what
I'm saying.
Speaker 16 (32:51):
I would say no, not entirely. I would say yes,
it's definitely a trophy asset, but they all are. I
would just say the playing field for soccer, the fact
that there really isn't any way to you know, to
just cap with with with Middle East money that's come
into a lot of it. You know, it's just very,
very difficult to extract a profit and continue to pay
these players and compete for these salaries with with the
(33:12):
likes of you know, uh, you know, Man City and
some of the others who have really really deep pocketed investors.
And I think that's what's kind of skewing all the
revenue generation, all the valuation multiples to the downside.
Speaker 6 (33:23):
In Europe any projection or outlook on the future of esports.
Speaker 16 (33:27):
So, esports and sports betting are two of the biggest
drivers of our you know. So Bloomberg's created the Bloomberg
equal Weight Sports Basket, which is a way that your
average sort of investor can take advantage of any number
of publicly traded stocks that have, you know, exposure to
the sports industry. And Breed Dowerdies and her team have
done a great job of developing this and sports betting
and esports are wow, such a big part of it.
(33:49):
And esports, especially if you look at the purse from
like the I'm not an esports you know, expert here,
but but but Nathan n I do. My colleague in
Singapore is and he said that the purse from like
the World Championship of East Sports is on par or
higher than that of Wimbledon. I mean, can you imagine
higher than the Masters here here, I'm talking to golf here.
You know, it's just amazing how much money is being
(34:09):
funneled into that specific sort of subsector of the sports industry.
And it's growing. It's growing at a cager of like
double digits over the past five years, which is just
astronomical and I think there's more to come our.
Speaker 2 (34:20):
Thanks to bi analysts and Business of Sports co host
Damian Sasaur.
Speaker 4 (34:24):
This week, Bloomberg Business Week reported in their annual ranking
of full time MBA program that Stanford Graduate School of
Business is again number one.
Speaker 2 (34:32):
Why Stanford host Scarlettfoo and guest host Stacy Vanick Smith
were joined by Demitra kesinid's Bloomberg News Senior.
Speaker 17 (34:40):
Editor, Stanford came out top of our US rankings. We
have rankings across regions, so it's not globally the number
one school, just to clarify, but uh, you know, it
certainly points to resilience and strength of the programs. Stanford,
as we know in Silicon Valley, with all its focus
on technollogy and entrepreneurism and more, has been very, very
(35:03):
strong for years. You know that maybe to some degree
masks some of the problems that we see that especially
in the US, but globally, schools are confronting. I mean,
there are a lot of challenges today. There are geopolitical challenges,
there are challenges that are more specific to the US.
With what we've seen play out over several months, given
(35:24):
the current administration stance towards international students, towards issues of diversity.
So there are certainly a lot of things that are
just making tensions a little heightened right now and are
really raising the level of discussion and concern among deans
in a way that has them trying to come together
from around the world and really think about how do
(35:46):
we best support each other to support education, because what
we ultimately are in the business of is education.
Speaker 13 (35:53):
Well, clearly some of those challenges have to do with
some of the some of the Trump administrations policies and
stances going after certain colleges and universities. How has that
factored in to business schools, to enrollment and to some
of the concerns that you're mentioning that deans of different
business schools are taking on.
Speaker 17 (36:13):
I mean, it's starting very slowly, you know. It's not
as though we're seeing some great exodus from people interested
in schools in the US. We still have a very
strong system of business schools in this country, also in
Europe and in Asia, and there are very particular facets
to each of them that appeal to students depending on
what they're looking for. But I think that international students
(36:34):
who have come to this country in very large numbers
to business schools are starting to really question whether this
is the best option for them given the opportunities available elsewhere.
And part of that mix also has to do with
factors that aren't so specifically about the administration right now
in the US, but about jobs and opportunities and growth
(36:54):
are schools in the US. In addition to some of
the factors that they're facing that are more about some
of these issues around diversity and international students, they're also
confronting a situation in which, you know, more graduates are
finishing their programs with no job in hand. The share
of students that are finishing and that have a job
offer within three months. While it's not again a huge shift,
(37:17):
but it is a shift we're seeing, is really it's,
you know, that sort of percentage is being cut away.
We've seen so many cuts in technology, We've seen cuts
in many other industries that are leading. Consulting is really
a big one that draws business school students historically in
very large numbers. Consulting is going through a huge shift
right now, largely because of AI. We've seen many stories
(37:41):
about this, the way it affects the work that they're
doing the way that they're recruiting, how many people they
need to hire. So it's affecting all schools in various ways.
International programs have a lot of partnerships with US programs.
US programs send a lot of students abroad. The visa
issues are also, you know, very very touchy right now.
So it feels like it's on many fronts and just
(38:04):
coming together in a way that's more sort of pronounced.
Speaker 4 (38:07):
And our thanks to demetri Kecndes, Bloomberg News Senior Editor.
Speaker 2 (38:11):
That's this week's edition of Bloomberg Intelligence on Bloomberg Radio,
providing in depth research and data on two thousand companies
and one hundred and thirty industries.
Speaker 4 (38:17):
And remember you can access Bloomberg Intelligence via bi Go
on the terminal. I'm Alexis Christophers and I'm Ball Sweeney.
Speaker 2 (38:24):
Stay with us. Today's top stories and global business headlines
are coming up right now.
This is Bloomberg Intelligence with Scarletfoo and Paul Sweeney.
Speaker 2 (00:05):
How do you think the FED is looking at tariffs?
The uncertainty of terriffs.
Speaker 3 (00:09):
Let's take a look at the sectors and how they
performed a.
Speaker 2 (00:11):
Lot of investors getting whip saled every day by news events.
Speaker 1 (00:14):
Breaking market headlines, and corporate news from across the globe.
Speaker 3 (00:18):
Could we see a market disruption of market events?
Speaker 2 (00:21):
So people just too exuberant out there?
Speaker 3 (00:23):
You see some so called low quality stocks driving this
short term rally.
Speaker 1 (00:26):
Bloomberg Intelligence with Scarlettfoo and Paul Sweeney on Bloomberg Radio,
YouTube and Bloomberg Originals.
Speaker 2 (00:34):
On today's Bloomberg Intelligence Show, we dig inside the big
business stories impacting Wall Street and the global markets.
Speaker 4 (00:39):
Each and every week, we provide in depth research and
data on some of the two thousand companies and one
hundred and thirty industries our analysts cover worldwide.
Speaker 2 (00:47):
Today, we'll explain how the global business of sports is
getting bigger fast.
Speaker 4 (00:51):
Plus a look at the yearly Bloomberg BusinessWeek's ranking of
the best business schools in the country.
Speaker 2 (00:56):
But first, this week, President Trump pushed for a six
month reporting schedule for publicly traded US companies. This would
in the current quarterly format to quote, save money and
allow managers to focus on properly running their companies for more.
Speaker 4 (01:09):
Scarlet Foo and guest host Isabell Lee were joined by
Michael Casper, Bloomberg Intelligence US equity strategists. They first asked
Michael to break down what this would mean for earning season.
Speaker 5 (01:19):
Certainly has been an idea that's been floated for quite
some time among ESG circles, even if you go back
to the twenty sixteen election, I believe Hillary was floating
this idea. But it does have some validity in terms
of aligning you know, shareholder ideas with long term performance
and management incentives. Right, if management doesn't have to beat
a quarterly number every quarter, they can more easily focus
(01:43):
on the longer term, and that certainly has its merits.
But again, I don't think chan is the best analog
to make right.
Speaker 6 (01:49):
There, talk to us about the risks that semi annual
reporting could post, because why haven't we done it? Obviously,
I'm sure that our regulators and policymakers have way into
pros and cons.
Speaker 5 (01:58):
Yeah, so it's a it's less flow of information, right,
So you think about the quarterly reporting schedule, you're getting
information every three months. As an investor, you can process
that information more accurately priced things in the market, And
with a six month time frame, you lose a little
bit of that, right, And obviously I think consensus estimates
will be a little bit less let's say, accurate, because
they have to forecast a six month time period instead
(02:19):
of a three month time period. So that there are
some bumps in the road with adopting this, But again,
if it can align shareholder value with management centis, maybe
you do get a benefit out of it.
Speaker 3 (02:32):
Would CEOs necessarily like this, I mean, I'm sure everyone
wants to save time and save money that that was
something that the President cited as a benefit of moving
to six months reporting as opposed to three months, But
in general, is this something that CEOs would favor.
Speaker 5 (02:47):
I don't know if they would favor it. I think
they'd be pretty indifferent to it. It's still the same
scheme of you know, you've got a number every six months,
you've got to beat that number. It's just more aligning
that goal with with shareholder value, right, So I don't
know necessarily if they favor one over the other. They
might think their life is a little bit easier trying
to beat on a six month time frame than a
(03:07):
three month timeframe. But I don't know if it really
affects cost too much. As the President pointed.
Speaker 6 (03:12):
Out, do you think that under the current SEC regime
that this would actually be approved because to Scarlett's point earlier,
and we all know this wasn't the first time this
was floated, But yeah, maybe it will be approved.
Speaker 5 (03:25):
Maybe, I don't know. There's again, it's been a really
long push of this and back and forth. Should we
do six months? Should we do annually? Evens there's some
countries out there that do annual, and it really hasn't
gained a lot of traction. I think investors in the
US are really set on the quarterly reporting schedule. They
really look for those quarterly numbers to drive their analysis,
and so it's going to meet a lot of resistance
(03:47):
amongst the investor.
Speaker 3 (03:48):
Community, I think, yeah, especially as more retail investors are
now investing in the market too. They want to hear
from the companies directly, and a lot of those companies
are tailoring their commentary to this new investor class as well.
Not so much institutional investors, but the individual investors out there.
Speaker 5 (04:04):
Yeah, certainly you've got this huge flow of zero day
trading options and everybody trading around earnings events, especially in
the retail space. That's huge. So maybe amongst the constituency,
obviously they don't have as much of a lobbying voice
as you know, your big institutional investors, but amongst his constituency,
maybe there's a little bit of resistance there as well
from the retail community.
Speaker 6 (04:24):
Would there be a sector or industry that would benefit
from a semi annual report, good question.
Speaker 5 (04:29):
Oh yeah, I don't know necessarily, if I could pick
a sector that would benefit the most. I think tech
obviously has gained the most from the quarterly reporting schedule.
Speaker 7 (04:40):
Right.
Speaker 5 (04:40):
They've done a really good job of managing their earnings
and consistently beating and you know, we've seen it time
and time again. IBM was the bastion of this back
in the nineties and early two thousands financial engineering to
beat the quarterly number. It's since, I would argue it's
been Apple and Microsoft have been very good at it.
So I think Tech's been the biggest beneficiary, So maybe
the biggest.
Speaker 2 (05:00):
Our Thanks to Michael Casper Bloomberg Intelligence US equity strategist and.
Speaker 4 (05:03):
Speaking of earnings, Paul, we got results from Cracker Barrel
this week.
Speaker 2 (05:06):
The company offered sales guidance that missed expectation, showing the
brand is still dealing with a fallout from its controversial
and short lived logo change.
Speaker 4 (05:15):
For details, we caught up with BI restaurant analyst Michael Halen.
Speaker 8 (05:18):
They were recorded a great quarter. You know, Same Star
sales were up five point four percent in the restaurants,
a couple hundred basis points ahead of the street. But
sales have decelerated pretty significantly here, you know, since August
in the logo controversy. So you know, thought Julie Messino
did a great job. I think she's running a steady
(05:40):
ship right now. And you know, they're focusing on the
things that they've been focused on from the beginning, which
is providing better service and higher quality food at a
good price point. I would say it seems like they
may have sandbag guidance as well. They basically are extrapolating
current track grafic trends throughout the rest of the quarter.
(06:04):
You know, when second measure data that that Bloomberg owns
that that we follow is showing that traffic may be
stabilizing here. So I guess, I guess we'll see.
Speaker 2 (06:14):
All right, let's move on to what's going on with
our friends that darted.
Speaker 8 (06:18):
Yeah, you know Darden. It was an interesting quarter. Sales
were fantastic, but slightly below you know, very high expectations,
and the most interesting part of their report was that
their margins contracted, largely due to beef costs and Uber
fees because they did this one million free delivery promotions
(06:41):
supported by you know, Uber eats marketing dollars, right, and
so it actually made up five percent of sales, and
that's very impressive for something that's been instituted, you.
Speaker 9 (06:52):
Know, within a year.
Speaker 8 (06:53):
So, yeah, the margins, you know this, this company has
best in class margins. They've always protected their margins and
so seeing a same store sales gain that, you know,
a very strong same star sales gain without the margin expansion,
I think shocked some investors.
Speaker 4 (07:10):
So what are they planning to do to widen those margins?
I heard the portions might not be as big? Are
they looking at possibly raising prices on the menu.
Speaker 8 (07:20):
Well, they're going to raise prices, but not too aggressively.
So they're very careful about increasing their prices. A big
reason why we think they're outperforming is that they've increased
their prices a lot less than competitors since the pandemic, right,
and so they don't want to lose that advantage. So
they are going to raise prices this year, but it's
(07:42):
going to be modest and less than peers. You know,
you mentioned the smaller entrees. That's really a move to
boost traffic. So what they're doing is they're taking seven
of their popular entrees. They're making an additional, lighter menu
with those seven items. They're shrinking the portion and they're
(08:02):
lowering the price, and they're hoping that actually brings in
greater traffic with low income consumers. So shrinking the size
of the entrees isn't isn't a major plan in terms
of saving the margins. With the margins, it's going to
be you know, executing rights. That's what they're known for,
you know, consistently becoming more productive in their restaurants. That's
(08:25):
how they're going to try to fund this. You know,
there will be some slight price increases, and they mentioned
they could be a little bit more aggressive. If you know,
the higher beef prices remain stubborn.
Speaker 2 (08:36):
Thanks to bi's Michael Halen.
Speaker 4 (08:38):
We also got earnings from General Mills this week.
Speaker 2 (08:40):
The maker of curios reported a solid quarter but was
cautious about the road ahead.
Speaker 4 (08:44):
We spoke with b I Consumer Stables analyst Diana rosso Penya.
Speaker 10 (08:48):
They were mainly in line with expectations. It wasn't that
much of a surprise, but still, you know, the stock
is a little bit on the south side. People expected
better news than what they disclosed.
Speaker 4 (09:03):
Yeah, I mean North America sales came under pressure. What
was the drag there?
Speaker 10 (09:08):
It was mainly on volume. We expected volume declines but
not to the magnitude that they did. It was down
four percent on organic on the organic part, so obviously
consumers are still trading down. They are mentioning that, you know,
about eight brands of theirs. It was positive, but it's
(09:31):
still it wasn't enough for the whole segment two to
pull through.
Speaker 2 (09:35):
What are they doing or what are they saying about
tariffs and the impact on their costs versus maybe what
they're trying to pass along to customers.
Speaker 10 (09:42):
So they are upsetting some of the costs with cost savings.
It's usually going to be They expected to be about
one to two percent of cogs this year, which is
a little bit lower than for example, Campbell's expected they
expected around four percent.
Speaker 4 (09:58):
So you know, they're not there.
Speaker 10 (10:02):
They do not want to raise prices. They want to
be competitive because obviously volume growth is not happening.
Speaker 4 (10:09):
So yeah, I mean, they're getting competition from more folks.
I mean, on the one hand, they're benefiting from the
fact that more people are eating at home, right, but
yet when we're going to the supermarket, more people are
choosing those private label brands. What's their sort of you know,
plan of attack there.
Speaker 10 (10:23):
Yeah, so they're increase in marketing, They're they're hoping for innovation.
Speaker 7 (10:28):
Uh.
Speaker 10 (10:29):
They mentioned that twenty five percent of sales growth will
come in North America retail will probably come from innovation
this year. And this is what all everybody's trying to
get to the problem is. And that was mentioned on
the call as well, was that even the price increases
are not as significant as it used to be, they're
still high.
Speaker 4 (10:50):
So on a basket size.
Speaker 10 (10:53):
You're still paying a lot more than the used to
two years ago.
Speaker 2 (10:56):
Talk to us about store brands versus kind of the
the brands. We all grew up with. Here, tell us
how that's changed over time. Our store brands are becoming
a bigger, bigger part of the average cart.
Speaker 10 (11:07):
Yes, well, retailers are investing more on their private label.
It allows them to bring people into the store. Some
of the brands are have a cult following. I will say, hello,
Costco so exactly, so people are going to the store
to buy that particular brand. They're more profitable than national brands,
(11:29):
So obviously they're still incentive for retailers to deploy some
of that some of their own I think.
Speaker 4 (11:37):
Some people take it cheek to buy private label, right, Well,
we're at like a badge of honor.
Speaker 2 (11:42):
Certainly. I was shocked at the price differential.
Speaker 4 (11:45):
Yeah, because they have that pricing power right These stores
to you know, make their products a lot more attractive.
Really quick Blue Buffalo, it's their pet food. I was
surprised to see that that that was not a leader
for them.
Speaker 10 (11:56):
Yeah, so Wilderness was not is not doing as well
as they are hoping. Dog food in general has been
a headwind, not only for them but also for the
overall industry. Cat food seems to be the leading indicator here,
which is surprising, but.
Speaker 4 (12:16):
Cat food is outpacing dog food.
Speaker 10 (12:18):
Yes, correct, We have seen this for the past year.
There seems to be a growth in the cat population
more than the dog population.
Speaker 2 (12:26):
Thanks to Diana coming out.
Speaker 4 (12:29):
We look at Elon's purchase of one billion dollars worth
of Tesla shares.
Speaker 2 (12:34):
Listening to Bloomberg Intelligence on Bloomberg Radio, providing in depth
research and data on two thousand companies and one hundred
and thirty industries.
Speaker 4 (12:40):
You can access Bloomberg Intelligence via bi go on the terminal.
I'm Alexis Christophers and now Paul Sweeney.
Speaker 9 (12:46):
This is Bloomberg.
Speaker 1 (12:51):
This is Bloomberg Intelligence with Scarlett Foo and Paul Sweeney
on Bloomberg Radio.
Speaker 2 (12:58):
I'm Paul Sweeney. Join this week by Alexis Christophers. We
moved to news from the ev giant Tesla. This week
Elon Musk purchased about one billion dollars worth of Tesla shares.
Speaker 4 (13:07):
And this comes after the billionaire was awarded one of
the biggest pay packages in corporate history. For details, host
Scarlett Foo and guest host Isabelle Lee were joined by
Bloomberg Global Autos editor Craig Trudell.
Speaker 11 (13:17):
There was an all out push with Robin Denholm the
chair of the company, speaking with us at Bloomberg Television,
speaking with you know, the New York Times, the Wall
Street Journal, all sorts of major news organizations about the
merits of this pay package that the board is proposing.
There's going to be a big shareholder vote in November
on handing you know, Musk, this this potentially up to
(13:41):
one trillion dollars worth of stock. There's a lot of
caveats all that that Musk would have to sort of
you know, pull a rabbit out of the hat again
after you know, doing so after a twenty eighteen pay
package where the board laid out out all these really
ambitious you know, market value and performance milestones. Musk, you know,
(14:02):
at that time it was kind of perceived as this
moonshot pay package. He proceeded to knock them all out,
and they're now calling this next pay package a mark
shot pay package. So, you know, I think there's this
This is all sort of part of a piece, right
of trying to get investors to sort of, you know,
focus on you know, far out there targets objectives from
(14:26):
Musks that would make shareholders a whole lot of money.
And it comes amid you know, real signs of stress
for the core here and now business for Tesla, where
their sales have just really struggled this year and there
haven't really been signs of of sort of meaningful change
in that trend even into this quarter.
Speaker 3 (14:44):
Right, So this will properly motivate him. I'm so glad
you brought up the twenty eighteen pay package and some
of the moonshot milestones that laid out for Elon Musk.
What was the most I don't want to use the
word outrageous, but the most ambitious of those milestones, And
did he s each and every one of them?
Speaker 11 (15:01):
Yeah, I mean in terms of the milestones there, I
mean just even the market cap figures. I think you know,
when when they were laid out, you know, it was
it was just sort of unfathomable that, you know, a
car company could be, you know, a trillion dollar company,
and you know, give give the guy credit. He went
out there and made it happen. You know. I think
(15:22):
Tesla now is trying to sort of, you know, incentivize
him to turn Tesla into a company that is many
multiples of even the VIDIA, the most valuable company in
the world in the here and now, and yet you know,
the sort of path to getting there is really uncertain
because you know, you've heard Musk make these pitches about
(15:44):
robotaxis and about humanoid robots. But you know, he is
a long way from accomplishing some of these new objectives
that the board has set for him.
Speaker 6 (15:53):
This must buying shares personally, is governance concerns or could
it even actually reinforce skepticism about how closely Tesla's board
is aligned with his self interest.
Speaker 11 (16:04):
Generally, whenever a CEO or an insider of a company
is buying shares, that's taken as a good thing and
not necessarily you know, something to look at skins at
from a corporate governance perspective. It does, however, I think
it's worth sort of you know, thinking about this billion
dollar purchase and context. This is a guy who's you know,
sort of you know, a billion dollars can be found
(16:26):
in his couch cushions, right he is is the top
person on the Bloomberg Billionaire's Index. He's worth about you know,
four hundred and twenty billion dollars at the moment, and
so you know just how meaningful this is. With any
other CEO, you would look at a billion dollar Stoft
purchase and maybe take you know, take real note of
(16:46):
that with Musk, Is it that huge a show of confidence?
Maybe not in the context of, you know, just how
much wealth he has.
Speaker 2 (16:54):
Our thanks to Craig Drudell, Bloomberg Global Autos Editor.
Speaker 4 (16:56):
Keeping with Tesla, we're going to move now to door safety.
Speaker 2 (17:00):
This week, US auto safety regulators open an investigation into
whether Tesla door handles are defective.
Speaker 4 (17:05):
And this comes after a Bloomberg exclusive saying NHTSA received
complaints that Tesla's design features like the door handles are
confusing occupants and first responders.
Speaker 2 (17:14):
For more, Scarlett Fille and Stacey Vandock Smith were joined
by Steve Man Bloomberg Intelligence, Global Autos and Industrials Research Channels.
Speaker 12 (17:20):
Well, it is a very serious situations, serious safety situation. Now,
first of all, there is a manual release from the
interior of the vehicle. But the safety issue is that
you can't manually override the electronics and open the door
from the outside. Now, this is an issue that's I'm
(17:42):
plaguing the whole industry. It's not just Tesla, okay, and
you know there's there's a number of automakers have solved
the issue, and I think Tesla does need to solve
this issue because you know, you know, people have died
because of this problem. Here, I think from the investor's perspective,
(18:02):
there is a solution. There is a number of vehicles.
For example, the Aldi they have actually solved that issue,
and they they solved it by you know, having a
double pull on the latch to actually open the vehicle manually.
So I think from an investor perspective, it is an issue.
It needs to be solved, and it's solvable. As you know,
(18:23):
the trillion dollar pay package and uh and the reieration
of the company moving towards AI is really getting the
investor very excited. The robo taxi is rolling out, apparently
the extended the model Y is selling really well in China.
So and then in Europe, where we saw a lot
(18:45):
of decline in ev sales seems to be ticking up.
Speaker 3 (18:48):
But the pay package rewards Elon Musk for thinking really big,
not dealing with how to unlock car doors. In the
event of some kind of problem, you say that Audi
has solved this, Are Tesla engineers going to take their
queue from Audi?
Speaker 12 (19:03):
Possibly? Really? Yeah, I mean it's it's it's important. It's
important that they solve this because Tesla, when they roll
out the robo taxi, safety is an important issue for them,
and it's an important issue not just for Tesla, I
think for the whole industry, and it's a reputation that
they're trying to build, especially you know they're they try
(19:24):
to roll out robo taxi and you know, they want
to project themselves as a safe automaker. So I think
it's going to be a priority list for for Elon
Musk and the rest of the organization there.
Speaker 13 (19:37):
It does also seem that that people are feeling quite
optimistic about this stock, but also there's there does seem
to be a liability issue in addition to a need
to solve this problem issue. Is that at all concern?
Speaker 7 (19:51):
Yeah, it is.
Speaker 12 (19:52):
It is a liability and I wouldn't be surprised that,
you know, there's going to be other legal issue that
that come up. I think from an investor perspective, this
is normal. Business recalls are normal and there are other
safety issues that has been recall not just at Tesla,
(20:12):
but and other automakers. So I think the investor are
taking this. I don't want to say lightly, but it's
normal business that we're going to get over this.
Speaker 3 (20:25):
It's a work in progress. Yes, are there other safety
issues in particular that Tesla needs to focus on pay
attention to that could, if left unresolved, could become legal
liability issues.
Speaker 12 (20:37):
Robotaxi there's still a safety driver sitting on a passenger
seat pretty much on every Robotaxi. I think there is
discussions of taking the safety driver out at the end
of the year, but I think they need to tread
very very carefully, especially for Tesla. It's a high profile company.
(20:57):
Anything negative is going to damage the reputation, and so
if they don't take up the safety driver at the
end of year, I wouldn't be surprised. I think they
do need to take it one step at a time
and make sure everything goes well before they do a
full launch without the safety driver.
Speaker 2 (21:16):
Our thanks to Steve Mann Bloomberg Intelligence, the global autos
and industrials research analysts, and.
Speaker 4 (21:20):
Each week we look at research from Bloomberg n EF
previously known as New Energy Finance.
Speaker 2 (21:25):
They're the team at Bloomberg that tracks and analyzes the
energy transition from commodities to power, transport, industries, buildings, and
agricultural sectors. This week, look that data center Demand and
R Plus north America's biggest renewable energy conference.
Speaker 4 (21:39):
For more, host Scarlett Food and guest hosts Isabelle Lee
were joined by Derek flackl BNEF, lead US policy analyst.
Speaker 14 (21:46):
Ri E Plus and Real Energy Plus is one of
the biggest conferences in North America. You see battery manufacturers,
transform manufacturers, energy storage manufacturers from all over the world
hawking their wares, and basically what everybody is trying to
do is rush to build, rush to safe harbor in
order to get legal compliance, to get tax credits in
the US government before rules change at the end of
the year. Now, as a reminder, those who are following
(22:07):
the Trump administration will recall the one big Beautiful bill,
a big budget act passed to the middle of the
year that has substantial changes for the way that you
can claim tax credits. If you're a window solar project,
you have to get under construction by a certain deadline
or you face an even harder cut off or when
your project can enter service, and at the beginning of
next year, suddenly you've gotten new foreign entity of concern
rules that could make you in eligible for tax credits
(22:29):
based on your exposure to mostly Chinese firms, whether through
corporate ownership, through supply chains, or through intellectual property and
other agreements. You're seeing firms restructure themselves in order to
avoid getting hit by those rules. You're seeing developers build
up massive stocks of solar and energy storage in order
to try and have equipment that allows them to claim
(22:51):
those credits before the rules come into effect. And you
also have massive growth in US battery factories and new
players entering the market to try and ser more domestic demand.
So you see this combination of a rush with the
possibility of a cliff afterwards. And I think everybody is
waiting for new rules to come out to provide some
clarity on exactly how much of the market can survive
(23:12):
the shift.
Speaker 3 (23:12):
How anxious were the companies and the executives at this
event because, as you mentioned, they are moving quickly because
the rules could change on them. The goalposts could change
at any point. What is the one certainty that they
have in operating through this uncertainty.
Speaker 14 (23:30):
I think the one certainty that they have besides that
more change is coming, is that there is going to
be load growth in the grid as a kind of
tailwind supporting the market in phase of other headwinds. Right,
we all know that data centers, among other applications like
new manufacturing and electrification, are causing electricity demand to rise
for the first time in the US in about two decades,
and at very fast, kind of chunky rates. So that
(23:53):
in turn means that electricity prices are going to have
to go up, especially given that the tax credits that
were sort of subing new power build are going away
or at least being severely reduced. That in turn is
going to make the economic case work out for more projects.
But that is filled with uncertainties in and of itself. Right,
you have different utility markets, different states trying to change
(24:15):
the way that power is paid for by large load
customers like data centers, and where the cost falls, how
many projects get built, how much public utility comissions allow
given the cost increases that most rate payers are going
to see. That's a source of uncertainty even within that certainty,
And so you see at riplus there was a lot
of talk of virtual power plants or special timing on
(24:37):
electric vehicle charging, anything to sort of keep the electricity
system from being overbuilt because as a reminder, way the
electricity system is structured is for the hottest and coldest
days of the year, when there's the largest amount of
electricity demand. A huge amount of cost is driven by that,
and there's extra capacity that goes unused. A lot of
the time. People are trying to get creative about how
(24:58):
you use more capacity it's already on the grid to
prevent things from getting more expensive for customers, or if
you do need to build new stuff, basically putting those
costs on two data centers themselves. Nevertheless, there is still
a key tailwind in the face of this policy uncertainty.
It's just a question of what that actually means for
every other customer.
Speaker 2 (25:16):
Thanks to Derek Flack will be n EF lead at
US Policy Analyst.
Speaker 4 (25:19):
Coming up, we look at how the global sports industry
is huge and growing rapidly.
Speaker 2 (25:23):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries.
Speaker 4 (25:30):
You can access Bloomberg Intelligence via Big on the terminal.
I'm Alexis Christoffers and I'm Paul Sweeney.
Speaker 2 (25:35):
This is Bloomberg.
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As veterans We're no strangers to helping others.
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It's what we were taught, trained and told to do.
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It could be for anything, helping a friend.
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Move, listening to a fellow veteran for hours at any hour.
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Of the day.
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We just simply making time for people. A neighbor, a
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Where often the first to help. All this, there's no
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But we do have one question for the veterans listening.
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When is the last time you reached out for help.
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Perhaps it's time to do for yourself what you would
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Brought to you by the United States Department of Veterans
Affairs and the AD Council.
Speaker 1 (26:40):
This is Bloomberg Intelligence with Scarlet Foo and Paul Sweeney
on Bloomberg Radio.
Speaker 2 (26:47):
Paul Sweeney joined this week by Alexis Christopher's. Franchise valuations
are surging across the two point sixty five trillion dollar
global sports industry, with three year analyzed growth rates running
at it double digit pace across the majors.
Speaker 4 (27:00):
A loosening of ownership restrictions is driving an influx of
institutional capital into professional sports franchises, enabling access to a
deeper pool of potential investors.
Speaker 2 (27:10):
We broke down the numbers with BI analysts and Business
of Sports co hosts Damian Sasauer.
Speaker 16 (27:14):
Two point six five trillion is revenue generated or expected
revenue to be generated just this year alone from the
global business of sports. So let's put some color around it,
and really it's everything from the sixty billion dollars a
year that's generated from METIA rights, the thirty billion dollars
in advertising spend. But if you want to take that
two point six five trillion and it's recreational vehicles, it's
a parrel. It's everything. What we focus on is fan engagement,
(27:36):
and fan engagement is roughly seven hundred and fifty billion
in revenue generator per year, and there's no better mechanism
to take advantage of that segment than to own a
professional sports team.
Speaker 11 (27:46):
But you cannot.
Speaker 16 (27:46):
Everyone can own one, right they're privately listed or I'm sorry,
they're not publicly listed. They're private entities. You just can't
invest in them easily. So together with Brian Dougherty, get
the Raganathan, Kevin Niar and the whole team here at BI,
we came up with some way is that you know,
your everyday investor might be able to take advantage of
the opportunity set in the global business of sports. And
we wrote a huge research report on it and it's
(28:08):
really good.
Speaker 6 (28:09):
We did watch your twelve minutes segment and then you
said that the difference is the sports industry has limited
public access.
Speaker 17 (28:15):
Is that for the better?
Speaker 16 (28:17):
So it's changing, So the rules changes, specifically with regard
to private equity investment in the NFL. I mean the
NFL is first among equals. I mean their national media
deal is eleven years, one hundred and ten billion, something
along those lines. It's twelve billion and average annual value
per team. It dominates professional sports. But really, at the
end of the day, you know what you are seeing
here from some of the recent transactions that have taken
(28:38):
place in the private space. Talking the Philadelphia Eagles, the
Buffalo Bills, a lot of these teams have sold small
minority interests in their teams to private equity. It's driven
the entire the entire universe higher so to put some
some numbers around it, since year end alone, the average
NFL team has gone up by thirty five percent in valuation.
(28:59):
So the top twenty five teams across all of professional
sports I'm including international sports like soccer, the NFL now
comprises twenty two of the top twenty five slots alone,
led by the Dallas Cowboys of course, but the Jets
are up there. So yeah, no, I mean like it
used to have a sparring of the yeah, right, despite
their best effort, Scarlett, but you know, used to have
FC Barcelona, Real Madrid, you have, you know, some baseball
(29:20):
teams like the Yankees, Dodgers in Red Sox that used
to be up there, and a lot of them have
kind of fallen back due to the fact that private
equity is now and allowed to invest in the NFL.
Speaker 3 (29:29):
Okay, I mean private equity being allowed to invest in
the NFL was definitely a watershed moment, but private equity
was allowed to invest in European football clubs for a
lot longer before.
Speaker 15 (29:38):
We're different sport, yeah.
Speaker 7 (29:39):
Very different sport.
Speaker 3 (29:40):
But I'm curious in terms of the breakdown of that
two point sixty five trillion dollar number, how much of
that is tied to the NFL. How much of that
is tied to things like European soccer.
Speaker 16 (29:49):
Well, I mean it's a much smaller percentage than that, right,
because I mean that two point six to five trillion
that's generated a year. I mean, again, it has everything
to do with recreational vehicles, the footwear in a parrel.
But if you're just talking about a sports team and
how they generate their money, it's just really national media
rights or local sports media rights, and it's gate receipts primarily,
you know, ticketing, parking concessions, the things that you pay
(30:10):
for when you go to an event. Right, So you know,
if you just want to talk about gate receipts, I
mean one hundred and sixty two game schedule for the
Major League Baseball, they dominate in gate receipts, but in
national media rights, which is the real animal that everyone's
chasing right now. You hear about the NBA's new media
rights deal F one UFC. The Major League Baseball just
did something new there as well. You know, it's the NFL.
(30:30):
I mean, the NFL is first among equals and national
media deals. It represents seventy five percent of every team's
average annual value revenue that's generated every year. So yeah,
you know, I mean, you know, these national media deals
are huge, and now that the NBA just did its
big deal, we expect that, you know, come, I believe
twenty twenty eight, Scarlet, the NFL is going to re up.
It has the ability to buy out of its existing
(30:53):
contract and renegotiate it, and it definitely is going to
do that. And I think that's what's commanding a lot
of these valuations because in specifically private equity investors, they
see this and they want to take.
Speaker 9 (31:03):
Advantage of it.
Speaker 6 (31:03):
Can you talk about the revenue mix, because it varies
across major leagues. I'm looking at this really pretty table
you have for NFL, the biggest driver is national media.
Speaker 2 (31:11):
Yep.
Speaker 6 (31:11):
For NHL, and I'm eyeballing here, it's ticket sales and
it seems like concessions slash parking. Who would have thought
is kind of a significant chunk across all of them.
What do you think will be the single biggest driver
or is it really going to be different?
Speaker 16 (31:23):
Well, that's only because the average franchise value to revenue
multiple for the NHL is just seven point seven times.
I mean, in the NFL's case, it's twelve and a
half times.
Speaker 3 (31:32):
NFL isn't a league of it, nothing else even compares, correct.
Speaker 16 (31:36):
I mean, but you might argue, I mean, look, despite
the fact that the NHL generates you know, call it,
I don't know, two billion dollars in revenue per year
on average, you know, it's still it's multiple still smaller
than that of Major League Soccer, which generates much less.
And again that just has to do with the fact
that you have all these MLS valuations now on the
back of you know, some great European players like Messi
(31:57):
who are now coming to play in places like Miami.
Just try up a lot of these valuations and so yeah,
you know, I mean, you know, we're still in early days.
But really it's the entrance of institutional capital, Isabelle, that's
really driving everything higher. You know, for the first time ever,
you know, institutional investors are gaining access to these sports
teams and they are looking to you know, get a
(32:18):
high return on investment from them. And just to be
very clear, you mentioned soccer before, because of relegation on
all these things. In soccer, in the fact that there's
no salary cap is very very difficult to extract a
profit from owning a EPL team, a European Premier League team,
whereas the salary cap allows for you know, I guess
better profit generation in the US. And so I think
(32:38):
that's one element to why you're seeing a lot of
the evaluations for these real Madrid FC, Barcelona come off
relative to the NFL.
Speaker 3 (32:45):
So owning a European soccer club is more about bragging
rights than actually making money. Is that Is that what
I'm saying.
Speaker 16 (32:51):
I would say no, not entirely. I would say yes,
it's definitely a trophy asset, but they all are. I
would just say the playing field for soccer, the fact
that there really isn't any way to you know, to
just cap with with with Middle East money that's come
into a lot of it. You know, it's just very,
very difficult to extract a profit and continue to pay
these players and compete for these salaries with with the
(33:12):
likes of you know, uh, you know, Man City and
some of the others who have really really deep pocketed investors.
And I think that's what's kind of skewing all the
revenue generation, all the valuation multiples to the downside.
Speaker 6 (33:23):
In Europe any projection or outlook on the future of esports.
Speaker 16 (33:27):
So, esports and sports betting are two of the biggest
drivers of our you know. So Bloomberg's created the Bloomberg
equal Weight Sports Basket, which is a way that your
average sort of investor can take advantage of any number
of publicly traded stocks that have, you know, exposure to
the sports industry. And Breed Dowerdies and her team have
done a great job of developing this and sports betting
and esports are wow, such a big part of it.
(33:49):
And esports, especially if you look at the purse from
like the I'm not an esports you know, expert here,
but but but Nathan n I do. My colleague in
Singapore is and he said that the purse from like
the World Championship of East Sports is on par or
higher than that of Wimbledon. I mean, can you imagine
higher than the Masters here here, I'm talking to golf here.
You know, it's just amazing how much money is being
(34:09):
funneled into that specific sort of subsector of the sports industry.
And it's growing. It's growing at a cager of like
double digits over the past five years, which is just
astronomical and I think there's more to come our.
Speaker 2 (34:20):
Thanks to bi analysts and Business of Sports co host
Damian Sasaur.
Speaker 4 (34:24):
This week, Bloomberg Business Week reported in their annual ranking
of full time MBA program that Stanford Graduate School of
Business is again number one.
Speaker 2 (34:32):
Why Stanford host Scarlettfoo and guest host Stacy Vanick Smith
were joined by Demitra kesinid's Bloomberg News Senior.
Speaker 17 (34:40):
Editor, Stanford came out top of our US rankings. We
have rankings across regions, so it's not globally the number
one school, just to clarify, but uh, you know, it
certainly points to resilience and strength of the programs. Stanford,
as we know in Silicon Valley, with all its focus
on technollogy and entrepreneurism and more, has been very, very
(35:03):
strong for years. You know that maybe to some degree
masks some of the problems that we see that especially
in the US, but globally, schools are confronting. I mean,
there are a lot of challenges today. There are geopolitical challenges,
there are challenges that are more specific to the US.
With what we've seen play out over several months, given
(35:24):
the current administration stance towards international students, towards issues of diversity.
So there are certainly a lot of things that are
just making tensions a little heightened right now and are
really raising the level of discussion and concern among deans
in a way that has them trying to come together
from around the world and really think about how do
(35:46):
we best support each other to support education, because what
we ultimately are in the business of is education.
Speaker 13 (35:53):
Well, clearly some of those challenges have to do with
some of the some of the Trump administrations policies and
stances going after certain colleges and universities. How has that
factored in to business schools, to enrollment and to some
of the concerns that you're mentioning that deans of different
business schools are taking on.
Speaker 17 (36:13):
I mean, it's starting very slowly, you know. It's not
as though we're seeing some great exodus from people interested
in schools in the US. We still have a very
strong system of business schools in this country, also in
Europe and in Asia, and there are very particular facets
to each of them that appeal to students depending on
what they're looking for. But I think that international students
(36:34):
who have come to this country in very large numbers
to business schools are starting to really question whether this
is the best option for them given the opportunities available elsewhere.
And part of that mix also has to do with
factors that aren't so specifically about the administration right now
in the US, but about jobs and opportunities and growth
(36:54):
are schools in the US. In addition to some of
the factors that they're facing that are more about some
of these issues around diversity and international students, they're also
confronting a situation in which, you know, more graduates are
finishing their programs with no job in hand. The share
of students that are finishing and that have a job
offer within three months. While it's not again a huge shift,
(37:17):
but it is a shift we're seeing, is really it's,
you know, that sort of percentage is being cut away.
We've seen so many cuts in technology, We've seen cuts
in many other industries that are leading. Consulting is really
a big one that draws business school students historically in
very large numbers. Consulting is going through a huge shift
right now, largely because of AI. We've seen many stories
(37:41):
about this, the way it affects the work that they're
doing the way that they're recruiting, how many people they
need to hire. So it's affecting all schools in various ways.
International programs have a lot of partnerships with US programs.
US programs send a lot of students abroad. The visa
issues are also, you know, very very touchy right now.
So it feels like it's on many fronts and just
(38:04):
coming together in a way that's more sort of pronounced.
Speaker 4 (38:07):
And our thanks to demetri Kecndes, Bloomberg News Senior Editor.
Speaker 2 (38:11):
That's this week's edition of Bloomberg Intelligence on Bloomberg Radio,
providing in depth research and data on two thousand companies
and one hundred and thirty industries.
Speaker 4 (38:17):
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