UEFA Votes to Boycott World Cup in Protest to FIFA Selloff

0:00So, like 100 % of investors think that protection is important, but only about 70 % of advisors are like talking to their clients about that.

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1:27Scarlet Fu:Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. Let's go back to the big headline that we were just talking about. UEFA members, and this is, of course, a European body that governs football, has agreed to boycott the World Cup. There's a lot of conditions here. So I want to bring in Randall Williams. He is our global business of sports reporter here in New York. Randall, they had threatened to do this to boycott the World Cup. And this is if FIFA moves ahead with spinning off this commercial and media rights arm the way that the PGA Tour has done with its businesses.

2:07Scarlet Fu:Just walk us through how significant this is. It's huge. So you think about the members of UEFA. It is the world champion, Spain. It is one of the final four, two of the three of the final four. Now that I think about it, it is England. It is France. It is Croatia. It is Portugal where Cristiano Ronaldo plays. And so a lot of these superpowers in the global business of football and the global sport of football are saying you do this and we're out. That strips the World Cup of a lot of its popularity. And I do think that in the matches that I went to, they have a different culture than what we see in South America that is more tribal in nature.

2:42And so I think it's huge. It is a very, very big deal that UEFA is saying no, absolutely not. Now, the next question is, what is CONCACAF going to do? And CONCACAF is over North America, Central America and the Caribbean. But this is a huge deal. So how radical is it for FIFA to propose selling a stake in itself? It's huge. I mean, look, with the PGA Tour and Live Golf comparison, and the PGA Tour had to write some things and Live Golf was exploiting some of maybe the flaws previously in the PGA Tour. Now the PGA Tour is writing us wrong. A lot of the players are happy. There haven't been that many complaints on FIFA's side in terms of how this tournament went.

3:22There are European nations who weren't happy with it expanding to 48, but now they're talking about going to 64. What does that mean for those super-powered countries is that they play more smaller teams and the group stages get larger, which of course will grow the money, But is growing the money that way the way that it's supposed to happen? I'm not so sure. And that's what UEFA is looking at this and saying, if we're going to grow the business of soccer and the business of football, then we need to do it the right way. And this is not the right way.

3:49Scarlet Fu:So the feud is escalating. FIFA must have anticipated this. I mean, I can't imagine that they didn't think UEFA was going to blow up in fury over this. What are you looking for in terms of response from FIFA? How they navigate this? Well, I would say UEFA and FIFA's relationship has long been strained. They have always been going back and forth. And this was the last straw for UEFA. And so at this point, what I'm watching next is to see what Gianni Infantino does. Of course, J.P. Morgan, who is running this deal with Thrive Capital and Kushner, of course, they are the recipients of this. They are the ones who are giving money.

4:25And so this is on FIFA and Gianni to try to get this thing across the finish line. But if your superpowers, if England, France, Spain, Portugal, Croatia, and so many of them don't participate in the World Cup, is anybody going to watch? Is that money that you're spending that you could potentially be spending? If they say we don't want it, OK, like now what is you're going to do a World Cup with a lot smaller nations? I just don't think that that would be successful. Wow. Interesting. All right. This is what I call a developing story.

4:53Scarlet Fu:Yeah, a major developing story, especially considering, like you said, three out of the four countries that made it to the finals were part of UEFA. The thought is that this money would be spent to develop programs. But is this the right way to do it? How many conversations did JP Morgan and FIFA have with other suitors? Did they go to private equity? Did they have billionaires who were interested in this? I'm not so sure. It looks like Bloomberg reported a couple of days ago or maybe this morning that this was already agreed to or we were talking about it long before the World Cup begins. And that's a problem because for UEFA.

5:29Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. Over 100 trillion dollars estimated to be transferred to generations in the next 25 years. It's both a risk and opportunity because we see that only about 18, 19 percent of high net worth investors plan on sticking with their advisor post-transfer. This has to be a tough statistic for some to hear. People who work so hard trying to grow their net assets, they want to protect that life work and they want to make sure that it is able to transfer in a seamless way.

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6:58Scarlet Fu:Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a health care company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together.

7:37Scarlet Fu:Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.

8:24although its losses have been moderating, I guess is the way to put it.

8:29Scarlet Fu:It's down less than it was before. Meta currently down 9 % right now. Investors not liking what they're hearing. So let's bring in David Kirkpatrick, founder of Techonomy, also wrote the book on the company formerly known as Facebook. His book was The Facebook Effect, the inside story of the company that is connecting the world. And David, you point out that meta disappointing investors not meeting financial expectations, even marginally, is a major change because Mark Zuckerberg has run this company to consistently and relentlessly top investor estimates. What do you think is going on there? Well, thanks so much for having me, Scarlett and Paul.

9:07Well, we are in an extremely precarious time for any of these tech giants with the scale of capital investment that they're throwing towards AI these days. And the precariousness of the moment is compounded in the case of Metta because, among other things, they're being sued right and left for many things, but especially for harming the mental health of teenagers. I mean, it was interesting that among the one analysis of these results yesterday was that if they hadn't set aside$2.4 billion for legal contingencies, they would have made their earnings number, which they missed. So that's a, you know,$2.4 billion for most companies would be a really serious problem that you're expecting to pay that kind of money out because of legal settlements.

10:01For a company with$60 billion in profits annually, that's not so huge. But it just goes to underscore the complexity of this company's position in society and business. So that they continue to say they're going to spend$130 to$145 billion on capital expenditures for data centers this year. So, wow. That's all I can say. Yeah, David, it was interesting last night for investors, the comparison, the compare and contrast of Microsoft with their results and the stock trading up dramatically today, 14, 15 percent, and yet Meta down about nine. What is Meta's AI strategy, do you think? Oh, that's a great question.

10:46And I think a lot of analysts on the call with Zuckerberg yesterday would have liked to have gotten an answer for that. I mean, for example, recently Bloomberg broke the news that they were considering renting out data center capacity to other companies like possibly Anthropic or OpenAI, which they haven't yet done. And he didn't say anything about it on the earnings call yesterday. If they did, that would be a good way of monetizing these extraordinary capital expenditures. So far, Zuckerberg keeps making funny noises about, hey, we probably have enough uses for this capacity ourselves. That wasn't a clear answer.

11:26They have begun charging money for a lot of things they never charged for before. So you can now pay$50 a month and get access to a human if you have a problem with your Instagram. If you don't pay$50 a month, good luck on that. But the answer is, I don't think they fully know because I think they're waiting to see how the whole industry settles out. But I do think that Zuckerberg published a very strident and optimistic op-ed in the Wall Street Journal this week talking about he believes personal superintelligence is going to be the transformative force in the world and people have to have individual access to that and big companies can't be gatekeepers into that sort of capability.

12:13So if you read between all these lines, I think their strategy is they want to more or less compete head to head with companies like OpenAI and Anthropic by using advertising to subsidize the offering of free AI services that they believe ultimately will go to individuals all over the world to enhance their lives. That's a long-term statement, but I think that would be a summary of how Zuckerberg thinks about it.

12:42Scarlet Fu:And does Zuckerberg and Meta have the track record for that? I mean, it does selling ads very well, but does it do other things just as well? No. In fact, it has never done anything well aside from sell ads. It's never had a growing business of any size that really wasn't ad-based. I mean, they had 60 and a half billion in revenue and 59.3 billion of that was advertising this quarter. So, but ads can be used to pay for a lot of things. And I think that's what I was trying to say before. That, you know, we've seen OpenAI, for example, talk about how we're going to try to become an ad company. They can do that and they're already doing it a tiny bit.

13:25But really, that's a really hard transition for a company like that to make. It is the easiest thing. Zuckerberg and Meta are, in some ways, the world's best advertising-based company. And as they grow in other areas, if they can continue to use that for competence, it could be a tremendous asset in expanding out in the AI arena. Right now, they're just using AI to make the ads more seductive and their services more addictive. and I mentioned when I sent you a note earlier, I think it's highly ironic that they're being sued for making young people's lives worse because of the addictivity of their services.

14:09And yet what they're spending all their AI money on right now is making their services, in effect, more addictive. So they're paying all this money to make their services do more of what they're being sued for in some weirdly ironic way.

14:24Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. Whether you're planning a big tech event, launching a new campaign, or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options, from on-trend apparel and premium drinkware to tech, totes, and giveaways, so you can find the right fit for any audience, purpose, or budget. You can customize it all, your logo, your message, your look, and many items come with no setup charge to help you save. And if you're really watching the bottom line, you'll find standout choices at every price point so you can make a real impact while staying on budget.

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15:22Scarlet Fu:Let's talk about healthcare for a second. It doesn't always work the way people expect it to. If you've ever waited on a prescription refill or had a hard time getting the care you needed, you know the feeling. The system should just work better for everyone. That's exactly what the people at Optum are trying to do every day. They're a healthcare company linking patient care and pharmacy services and using data and technology to drive the whole system so care is connected, not complicated, for patients and providers. Things like making it easier to get care that looks at the whole person, from primary care doctors to mental health support and even in-home care, and then using technology to make sure they all work together.

16:01Scarlet Fu:Technology designed to help doctors spend less time on busy work and more time with their patients. And those prescriptions? Optum is working to bring costs down, save patients money, and make it easier to get refills. Little by little, Optum is helping make healthcare work as one for everyone. Head to business.optum.com to see how.

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16:55Scarlet Fu:You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. All right, let's switch gears, get back to the market here. Again, the S &P is up 60 points, the NASDAQ up 490 points, 2%, and the NASDAQ 100 is up 2.6%, so a little bit of a rebound for the tech names. More on the earnings fronts. Robinhood, the digital wealth management firm, reported some numbers that beat estimates. Stock trading down a little bit today.

17:29Not to worry, we have the chief financial officer of Robinhood in our studios, Shiv Vermin, CFO of Robinhood. Shiv, talk to us about your quarter that you guys reported. What was the message to the street these days about Robinhood? Yeah, thanks for having me. So first, record quarter. It was our best quarter ever in terms of net deposits. Customers trust us with$22 billion of their hard-earned assets. Really incredible to see. Second, it flowed the financial profile. Record revenue,$1.3 billion, up 32 % year over year. So not just on the asset side, but also the revenue. And third, we are launching a ton of new products.

18:04We just hit 13 businesses with$100 million of ARR. We added two new ones this year, our web product called Robinhood Legend and the credit card. So across the board, really great engagement from customers and translating the financial profile.

18:15Scarlet Fu:One of your existing businesses, crypto, is not doing as well. And it's partly because of the price action that we've seen in Bitcoin and the other digital coins overall. The crypto revenues beat, but they were down about 38 percent year over year and weaker volumes may be an issue going forward. What turns that around? Yeah, so it's a great question. First, we are long term bullish on crypto. We believe in the asset class. We believe it's here to stay. What are we focusing on? The infrastructure layer. And so a couple of things that we announced this quarter, the Robinhood chain, fastest chain ever to hit 100 million transactions.

18:48We also launched the Robinhood earned product. You can lend your crypto out on stablecoin and get 7%. So the asset class and the coins, it's great for customers. You want to provide access. It'll ebb and flow. I've been there eight years. I've seen probably four different crypto winters. But if you invest in the technology and you invest in the infrastructure, we believe that's here to stay. And the Robinhood chain was a great example of that. Shiv, what's a typical or who is a typical Robinhood investor? Maybe how has that changed? Yeah, great question. So who is our meeting customer today? Okay.

19:15They tend to be 35 years old. They tend to be married, tend to be educated, extra discretionary income relative to the U.S., widely distributed across the U.S., not just a coastal product, one or two kids or a cat or dog. That is our prototypical customer. What they're doing is as they're getting wealthier, they're using Robinhood for more and more of their products. So we announced Robinhood banking last year, just at 3 billion deposits, growing really, really nicely. Our customers also say to us, hey, I banked with Robinhood, even before we were banked. That's how they thought about it. And so as they're getting wealthier, they want the same products that everybody wants.

19:49Retirement assets, those are now above 35 billion. They want ETFs. We just launched custodial accounts. I have a young daughter. She has an account on Robinhood. Trump accounts. We're now supporting all the children. And so when I joined eight years ago, the average age was around 27 or 28. we are growing with our customers. They're getting more wealthy. They're asking for more products. And so we always start with what do our customers want? And then we build it for them. And as you do that, you start to see them consolidate more of their wealth.

20:14Scarlet Fu:Okay. So that median customer you were just describing, what is their interest level towards prediction markets? And, you know, when I ask about this, I'm curious beyond sports, the world cup, you know, what is their interest in trading futures contracts or these event contracts on, I don't know, GDP, the fed inflation, something other than sports? Yeah, so we just announced yesterday that we now have 2 million customers of use event contracts. Smaller relative to our 28 million customer base, but that was a million and a half customers just a few weeks ago, so growing really nicely. We are seeing customers use it for a wide variety of things.

20:46So you mentioned economics. Yesterday was Fed Day. You tend to see a lot of contracts around interest rates. When there's a cultural moment, so whether it was the World Cup, Taylor Swift's wedding, things of those natures, you tend to do it there. Elections are really popular, So we're starting to see a lot, not just for the midterms, but also the primaries. We think we are at the beginning of a prediction market super cycle, that this could actually be bigger than the equities market. The fun part is use cases are coming up out of the woodwork. So an example I've shared before is last winter, we saw a lot of customers trading weather contracts.

21:15We were trying to figure out what they were doing. They were hedging their flights. They were waiting for delays, and they thought to be another way. We also saw that in a certain state, they were using it during hurricane season. They were supplementing their home insurance. Now, customers won't explicitly saying I'm buying insurance, but that they were starting to use. So there are so many different use cases. There's no doubt sports has found product market fit. But if you look overseas, actually the majority of contracts are non-sports. And it tends to be cultural moments, lifestyle, things of that nature.