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

23:37The interest compounds into principle every month, every week. Whatever it is you've accrued in interest becomes a part of the base that accrues interest on interest 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 principal, 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 out what is the true end point of interest will be.

24:09Whatever it is we promised them, that's exactly what they pay. We're speaking with Max Levchin. He's the founder and CEO of Affirm, the$29 billion market cap fintech company. Also, you'll notice Carole keeps talking about bikes. He's a big cyclist, too. So, yeah, spends a lot of time on the bike.

24:24Carol Massar:So is Tim, by the way, Max. Oh, we know. We follow each other. I know you guys do. Hey, listen, one of the things I want to ask you, your stock is on a tear. It's up 50 % year to date. It surged as much as 25 % intraday 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? We just need to keep doing exactly what we've been doing. The joke I make all the time is we are an overnight success 15 years in the making.

25:00Profitability is not an accident. We gave this date exactly a year ago where we said, look, 12 months from now, we'll be GAAP profitable. Two years ago, we said, hey, 24 months from now, we expect to get profitable. And so we've been on a journey that we 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 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 intend to be GAAP profitable from this point on. That is not a thing you can decide last week and deliver tomorrow.

25:42It's something that you build over a long period of time. It takes discipline, it takes execution, it takes a great team, which I'm lucky to have. And so I'm not worried about that whatsoever. Whatever we commit to, we tend to deliver on.

25:54Carol Massar:Well, speaking of time, it's been a long time coming for Klarna and its IPO, and it does plan that here in the United States. Competition in the space is definitely max picking up. They are specifically rapidly expanding here in the U.S. You've got Sezzle. That stock is up about 7000 percent less than two years. There's a lot going on. So how are you seeing the competitive landscape evolve? And what does that mean for you guys specifically at Affirm? 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.

26:33We have a very strong point of view on what is and isn't moral, what is and isn't right for the consumer, for the merchant partners that we have. It's paid great dividends for us and our shareholders. So in that sense, we intend to change 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 in aggregate, buy now, pay later is still just under 1 % 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 buy now, pay later is more mature, there the penetration into e-commerce is on the order of 20%, 25%, I think.

27:13In the US, it's a much more polite 7%, 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 100 % year over year just in the last quarter's report. We're a fraction of a fraction. So the opportunity to provide more honest financial products is, I said it in my shareholder letter, sort of tongue in cheek, it rounds up to infinity. And so for now, we're not really running into each other in the hallways fighting for that last same customer or merchant. And 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 a zero sum game.

27:53But 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 a good thing. That just gives shareholders a sense for this has a long way to go in terms of growth. Hey, Max, before we let you go, just 30 seconds on crypto and stable coins. An opinion piece this week coming from Paul Davies of Bloomberg Opinion. He wrote that stable coins are an opportunity for merchants and airlines to recover costs from big banks and networks like Visa and MasterCard.

28:26Is there a use for digital assets at a firm? 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 consumers spending stable coins they have acquired in droves. 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 thinking in dollars and probably will continue to do so.

28:54Carol Massar:All right, got to leave it there. Hey, Max, thanks for carving out some time for us. Max Lefkin, founder and chief executive officer of Affirm. Max, of course, just a great voice when it comes to what's going on in the fintech space. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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31:36Carol Massar:Visit Bahamar.com today and discover a vacation destination where memories are made for a lifetime. Bahamar, life spectacular. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. big picture we're thinking about sports as a multi-trillion 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 all right let's get to it derek sprague is with us he's ceo of pga of americas and bluebird news texas bureau chief julie fine um they're just off their discussion up on the big stage, both of us here at Power Players.

32:28Carol Massar:I am curious, in that conversation, what was it that, I don't know, maybe surprised you in your conversation with Derek? 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 round of golf he ever played was with his kids. Yeah, it's always fun playing with your kids. I don't get to do it as often as I like, but it's always special when it happens. I have to say, I'm one of seven kids, four brothers, and a rite of passage was my brothers learning to play golf. And I'm so sad that I never learned to play with my dad.

33:03Carol Massar:And it's never too late, Carol, never too late. I know. Talk to us about the golf landscape. It continues to evolve and change. And whether it's foreign investment, a lot of things going on, new formats. Where do you guys fit into the overall ecosystem? 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 16 ,000 clubs in this country, and we have PGA professionals at nearly 10 ,000 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.

33:35You'll take lessons from our PGA members. First is 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. 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 low or no risk. Have you seen that growth continue? It's been incredible. We haven't used social distancing word in a long time, but golf, PG 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.

34:14And 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 all living together. They got to play the sport together. You have 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 28 million in this country. 550 million rounds of golf were played in 2024. It's just incredible growth since the pandemic.

34:46Carol Massar: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 are making. The biggest changes you've seen in Ryder Cup in that aspect. Yeah, this year, the Ryder Cup here in a few weeks in New York City's backyard out in Long Island and Bethpage is we have about 280 corporate partners. and 30 of those are from around the world. We certainly have our worldwide partners at the PGA of America for the Ryder Cup, but we have 30 partners from Australia and Japan coming in. Those 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.

35:33Carol Massar:How do you think of the role of the Ryder's Cup in the midst of what feels like a divided golf world right now? How important is that? Yeah, I mean, 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 and ruckus on Long Island. The Europeans are coming into our home court, so to speak, and as Keegan calls it, our captain calls it, America's course now. It used to be New York's public course, but it's America's course 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.

36:12And so many people, golf is booming not only in this country, it's booming globally now. More golf courses are being built around the world because of more golfers from around the world playing that are playing over here in America. They go back to their hometown and home countries and help start the game there.

36:27Carol Massar:Since the inception of the Live Tour, what we've also seen boom is the purses. I mean, these players are making a lot more money because of this really competing tour. 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 PGA, which we'll be holding at our home course at Frisco, Texas there. So, yeah, 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.

37:05Carol Massar:Might you see the Ryder Cup grow beyond the United States? 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 a great market to hold an event. It sure is. And then we'll play it. It'll be in Ireland in 2027. 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 50 ,000 a day will be coming to it. but a half a million, right? And then we had 30 ,000 on the list of volunteer.

37:3930 ,000 say, hey, we'll come and work. We'll buy a uniform. We'll come out there and work. We'll have about 4 ,000 volunteers out there.

37:44Carol Massar:But do you expect it beyond the U.S. and Europe? No, I don't think so, because this event goes back to 1927. We're coming up on our 100th anniversary in Ireland in two years, and I don't see that changing at all. I'm wondering about accessibility to the sport here in the U.S. and how you grow that pipeline, especially for U.S. players. We just went to the U.S. 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, a sport that oftentimes is associated with country clubs, similar to golf.

38:13What needs to be done in the U.S. to increase that pipeline for young Americans? Well, the PGA of America has been doing it now for over 10 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 2024, we had 77 ,000 juniors play. So our PGA of America golf professionals, they form these teams at their facilities. They compete against other teams from nearby facilities.

38:48And then we'll have a national championship actually in Frisco here in a few weeks. So, I mean, and that will be televised on ESPN. So even junior sports are seeing the big time on television, right? So, again, our PGA professionals are at the heart of growing the game, and PGA Junior League is just one of those great programs, probably the most successful program we've ever had for growing the game.

39:09Carol Massar:You have some really big names in golf right now. You look at like a Scotty 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 DeChambeau. 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. So how do you marry that? Yeah, well, I think the younger generation, they grew up, a lot of them, in this video game world. So now technology has helped them get in there. They've got range finders, and they're checking the yardage on their watches and stuff.

39:46I mean, it just connects them to the game. And then when you look at the alternative off-course things, like Topgolf in those type of venues, and you've got some right here in the city, right? You can go play golf inside the city here at some of the venues here. So I think that's transferring to whether you play nine holes or play a short course or play 18 holes. All these alternative forms of golf have helped elevate the game, especially with that demographic. And when they 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 in.

40:18That demographic, they're not doing the mile wide and inch deep. They're going a mile deep and an inch wide. So if they get on the sport, a certain sport, they're staying with it.

40:27Carol Massar: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? Yeah, well, I think that's what the sport does, 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.

40:55A lot of business deals are done on the golf course. So that's just one.

40:58Carol Massar:Is it still like, or is that just a stereo? No, no, it is. And when you think about it, as much as technology is 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 to play 18 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 be with a client for four and a half. 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, but then you get to spend time.

41:35And that's why I said earlier, just being able to play with my kids and spend four or five hours with women is great.

41:39Carol Massar:Is it still a lot of guys, though, playing? No. Like, have we seen an increase in women? In fact, 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 were 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 game, which is great. And then I hear I've 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.

42:11So it's wonderful to see, and that's 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 part of our foundation, which really helps grow the game for underserved communities. And we're trying to make the PGA of America is the entity that's trying to make the game look more like America.

42:35Carol Massar:You just talked about the human aspect of this. I'm now going to the not human aspect of this. Great segue. AI, changes in the game and technology. PGA of America, of course, in Frisco, Texas. That's how we know each other. 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, anything to dissect your game, that is there. What is the future of technology in the game? It's just going to continue to grow. In fact, that's one of the first things I did as the CEO when I got there. I talked to our head of education and I said, what are we doing?

43:10We have all our associates that go through our headquarters there. And they learn the trade and become a PGA professional there. And I said, what are we doing to teach them AI? Okay, not only with the launch monitors and all that, that'll have AI all factored in there with the algorithms and all that, but we're teaching our young associates how to use AI in running their golf facilities. So whether it's doing a flyer that's generated in a couple minutes rather than a couple 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, And hopefully it'll look better and then impress their bosses and their boards and their members.

43:48You know, one thing that we talked about, again, tennis fresh on our mind as the U.S. Open continues here in New York. And as we broadcast from there last week, the average age of a tennis coach here in the U.S. 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? 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.

44:19The highest growth is coaching. So we're not seeing that challenge. We're seeing more young professionals want to get into coaching. Why is that? Well, I think, one, it's a good lifestyle, right? Club operations can be challenging, right? You're coming to the club at 5 in the morning. You might be closing at 11 o 'clock at night. where teaching generally is done in daylight hours. And I think we've had such great success teaching players. Randy Smith is one of our PGA members, and he's teaching the number one player in the game, Scotty Scheffler, and we've done a lot of great segments on that.

44:52And 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.

44:58Carol Massar:We were talking with Derek Sprague. He's CEO of PGA of America. Also with us is our Julie Fine, Texas Bureau Chief here at Bloomberg News. Things evolve, things change, and things are questioned about. I do remember these conversations we were having that, like, younger generation isn't playing golf. Is it just the pandemic that you think got people more interested? Well, certainly that was probably a jump-started. But, you know, this sounds self-serving, but I look at some of the programs that we're doing, Carol, like PGA Junior League. We've been doing that for 10 years. Yeah. And it's grown every year for 10 years, right?

45:32And you're getting 70. So what happens, again, when you look at the multigenerational part of our sport, these kids play, okay, and then their parents, again, what's beautiful about the sport is they don't have to sit on the sidelines like some other youth sports. They don't have to be up in the stands. They can participate with their kids. So all of a sudden you take a couple 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.

46:02And these veterans, they're trying to re-assimilate back into civilian life. And our PGA coaches are helping 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 we have close to 33 ,000 PGA professionals, one of the largest working sports organizations in the world, PGA America is. So those members working at these 15 ,000 clubs nationwide are helping grow the game day in and day out.

46:32Carol Massar:Starting to pay it off. We've got one last question. We're going to let you, Julie, wrap it up for us. Perfect timing. And the last question is, 10 years, where are we in the game of golf? Yeah, well, today we're a$102 billion industry. I see that growing probably by another$20 or$30 billion. I think the retention rate is going to continue. And I think we're going to see, instead of 550 million rounds of golf being played, we'll probably see 600 million rounds of golf in 10 years and just continue to grow this sport. instead of 28 million golfers, you'll probably have 32, 34 million golfers in 10 years' time.

47:04So, again, all these programs are continuing to develop golfers, and our 33 ,000 PGA professionals are growing the game nationwide. And I think all these programs will just continue to add to the numbers economically in golf.

47:19Carol Massar:Well, I've got to say, I loved hitting golf balls at the driving range. It was just so much fun. It was just such a part of us growing up. Thank you so much. You're welcome. Thank you. Thank you. When are you guys doing the show from Texas? Hey, anytime you invite us. I'm on all the time. What's she doing from Texas? Bring us down. We will be there. Lots of family in Texas. Love, love, love this state. We'd love to have you. Derek Sprague, thank you so much again. You're welcome, too. CEO of PGA of America. And of course, our thanks to our own Julie Fine, Texas Bureau Chief of Bloomberg News. We're going to put on a cowboy hat.

47:46Carol Massar:We're going to come down. I'm waiting. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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49:53Don't miss Guns N' Roses. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 p.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube.

50:12Carol Massar:Soon to be up on the stage are our next two guests. Alex Rodriguez, chairman and CEO of A-Rod Corporation, Bloomberg 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, I have to tell you, this is my former co-host. Yeah. Before this one. Okay. So I feel your pain. From good to great. Oh, my gosh. Wow. From good to great. Wow. Oh, my. They're beating you up. You have home field advantage here. It's not working. How many seasons did you last with Jason? Four. Four or five? No, like two and a half years.

50:48It's the third season. It's the third season, the deal. So Alex is already there. Oh, my God. Now Alex and I's marriage has lasted longer than my marriage to Carol. This is amazing. Okay, now my world's turned upside down.

50:59Carol Massar:Well, tell us about the third season. You guys have been working together for a while. Yeah. How it kind of has evolved and how you think about who you want to be talking about in this world. I mean, it has evolved. I mean, we've had a really fun week this week. This is teasing ahead to later in the season. But, you know, later on, we're going to sit down upstairs with Justin Tuck, obviously former New York Giant, won two Super Bowls. He now works. He's a managing director at Goldman Sachs. I know. Which is amazing. But we've had a crazy last couple days because we, and you're going to love this one, Carol, because I know you're a fan of this person.

51:33The first was Erika Badon, who is former Erika Nardini. She ran Barstool. She had some incredible stories. And then yesterday, Robin Arzon from Peloton, who you and I interviewed way back in the day. I mean, Alex, that was unbelievable.

51:49Carol Massar:I mean, she's a force of nature. And what a story, right, to be a litigator, lawyer, one of the top firms in New York. And then around 2011, she says, you know what? I'm going to do a radical pivot. And she cold emails Peloton, gets the job. And one of the most things, I mean, there's so much to admire. But the fact they've been to the moon with their stock, right, over$30 billion market cap. But now it's obviously a lot less than that. And she has stuck it through. And we asked her about it, and she gave a fantastic answer. That's my tease for her. Yeah. The other thing that she said, which is so funny.

52:19So this is how – I mean, I'm going to tell a little bit behind-the-scenes story. Inside baseball. Inside baseball about the deal. And this is how I know that I think the show is really working is we literally sent each other voice memos this morning saying – like independent of each other saying my favorite part of the interview with Robin Arzon was this 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 basically like in this 45 minute conversation, there was one thing that we were both like, I'm going to use that in my day to day life.

52:50And I, 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, you know, we had in this most recent season, we had Bill Belichick on, a pretty rare business-side interview. I think he told us stuff that 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. And so, I mean, we're having a ton of fun. I mean, this is fun.

53:21Carol Massar:Another fun one, timely-wise, because you mentioned time, is Mark Shapiro's. They rang the bell, and they took TKO public. And he gave us some fascinating stories, going back to the Bob Iger days and what he was doing at ESPN and how 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 us and saying, hey, can we be a guy? Well, that's what I was going to ask, Alex. I mean, now that it is the 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.

53:50How are you thinking differently about the conversations and who you want on the program?

53:55Carol Massar:Well, I think Jason reminded me yesterday that we've done around 50 shows. So, we're getting some reps. We're getting out there. We're dropping one every week, which is the consistency is key in podcasting 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 Peloton 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 sports in the country. Well, and I think, you know, to build on 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 bought into our shared vision of this is we're talking about the intersection of business, sports and culture.

54:44And I think, you know, there's a fair amount that's being done around business and sports. You know, 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 Garfinkel from the Dolphins and Mike Garagetti, 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 involved on the board of University of Miami. University of Miami beating Notre Dame at Hard Rock Stadium last weekend was an unbelievable moment, like, in the broad culture.

55:22Carol Massar:I mean, it really was incredible. Yeah, and it had a huge number, around 13 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. To have 75 ,000 people cheering on, remember the old history, like bringing the old days back for the University of Miami, convicts versus Catholics, right? It's pretty awesome. And the fact that we won, I'm very, very happy about that. We're speaking, of course, with Alex Rodriguez, chairman and CEO of A-Rod Corp.

55:51Also, Bloomberg Originals 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? Oh, there's no question about it.

56:03Carol Massar:I mean, I think Michael Arregetti was talking about, you know, 10, 15 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, 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 emote. But then it's all the businesses around, whether that's a stadium, networks, you know, what the Atlanta Braves have done is incredible.

56:40Carol Massar:They did$75 million of extra cash flow for the team. I think that's the new model moving forward. Thank you for mentioning the break. That was very nice. I ran a person here. We should know it for everybody who doesn't know already. Smart co-host. That's so smart. So smart. So thoughtful. But, you know, I'll sort of toss it 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 a WNBA team. And I do think being able to, you know, we 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.

57:20And 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, I'm doing something new. We had Sue Bird 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, I do think that sort of unlocks something.

57:46Carol Massar:Do you agree? For sure. And especially, like, they just handed us the keys about, call it, a few months ago. And it's fun for us to think we just brought in a new CEO. Yeah. And Matthew Caldwell, who was formerly at the Florida Panthers, worked for my great friend, mentor Vinny Biola, 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 about the 92 professional sports team, when you include the four major leagues, NBA, NFL, NHL, and 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.

58:25Carol Massar:You know, I think there was always the worry, though, and I pose this question to both of you, of a lot of money coming in, gambling coming in, what that does to the sport. Has it, let me start with you, Alex, has it changed sports overall, all this money in? There's no question. There's a new data point that came out that blowout games in the fourth quarter in the NFL were doing better numbers in the second and first quarter. And that's because of fantasy football. In the interest level, that is 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.

59:00Carol Massar:I thought that was fascinating because most people in the fourth quarter, if it's a blowout, they're done. Net-net good? Yeah. What depends – It's complicated. It is complicated. Look, and there's regulations and you have to obviously put guardrails around everything. Right. Or money in college sports. 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 who was here on a panel earlier. And we have Dartmouth's athletic director joining us in just a few. And what 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 100 to 200 years.

59:42I 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 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 University of Miami and said, Hey, bro. Hey, Carson Beck. We'll pay you$4 million to come to University of Miami, which was probably 4X what he would have made his first season in the NFL if he got drafted.

1:00:15And then he goes down, plays in front of a bigger crowd in front of a, you know, in a higher profile game, higher viewership, you know, than he would have gotten if he had even been on the field in the NFL. That's a radical difference. Like that's complete.

1:00:31Carol Massar:It's a game changer. Is it a good one? Absolute game changer. Is it like a, who knows? 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. You know, 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. Yeah, I mean, imagine any league without a collective bargaining agreement, right?

1:01:04Carol Massar: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 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. Well, and the other thing, and to your point, Bill Belichick on our show said this is actually harder than coaching the NFL because it's free agency all the time.

1:01:39Carol Massar:So the kids can move around. Yeah. And they will move around. Yeah, we were talking about the portal with a colleague. We were talking about it with a colleague here. His son can just log in to a portal and go somewhere else. And he is going to move somewhere else. And if you look at some of the great coaches that we've lost from these institutions, whether you go to Bill, you go to Saban, Nick Saban, you go to Coach K, you go to Coach Wright from Villanova, a tough name for my Georgetown buddy here. Oh, my God. But I think one of the reasons they're leaving is if you scream at a kid, he's going, I'm out, I'm going to Georgetown, I'm going to University of Miami.

1:02:10And that wasn't the case back then. So what does this do to the pipeline going into the pros right now? I think college football becomes NFL junior. 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 form or fashion, Carson Becks, who opt not to go to the pros because they're going to make several million dollars playing in college for an extra year. And then, I mean, big-time football is going to just get bigger and bigger, and college is going to be a part of that. So, Alex, I'll ask you the same question I was asking you about sports gambling.

1:02:45Net-net, is this a good thing?

1:02:47Carol Massar:It's interesting, right, because I still remember the days with Pete Rose, right? I think the answer we don't know yet. But for college sports. Oh, for college sports. For college sports. I'm not sure about that. But I will tell you one correlation. Just to back up what Jason was saying is you've never had companies stay private longer, Whether it's stripe or whether it's many examples. I think you can have an example of players staying in college longer. Because they can develop. They can go to the University of Miami for a senior for$4 million. The kid over at Michigan, the quarterback,$12,$12.5 million.

1:03:24Carol Massar:That's amazing. Impressive. So it's a different world. So eight years in college and still no MD degree. Out! But they got a lot more money. Yeah, they got a lot. And no student loans. We just got a few seconds left here. Got a dream guest that you guys are like, if they're listening? Real quick. Roger Federer. Oh. Oh, good one. Roger Goodell. Oh, good one. All right. A couple of Rogers. Listen up. So Rogers, if you're listening, they're ready. Well done. Guys, thank you. Good luck up on the big stage. Thank you. We're getting ready to talk to you about Justin Tuck. All right, of course, Jason Kelly, chief correspondent Bloomberg Originals, Alex Rodriguez, chairman and CEO of A-Rod Corp.

1:04:05Carol Massar:They are the co-hosts of The Deal, the third season. It is underway. You can find it wherever you download your podcast. This is the Bloomberg Businessweek Daily Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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