Andy Burnham ghosts the UK business community

0:02Good morning from the Financial Times. Today is Friday, July 17th. And this is your FT News briefing. Investors are worried about Netflix's future growth, and UK businesses are worried about being ghosted by Andy Burnham. Plus, why is Europe so good at football? We'll take a look. So Western Europe has 5 % of the world's population. The whole rest of the world has produced one team to compete with them, and that is a team with Leo Messi. I'm Mark Filippino, and here's the news you need to start your day.

0:38So,

0:44Netflix revenues got a bump last quarter. The streaming giant reported earnings yesterday and said revenues grew by 13 % year on year. It credited higher subscription prices and more ad revenue. Netflix largely met Wall Street expectations, and that's the good news. The not-so-good news is that the company warned shareholders that it's forecasting its worst revenue growth in three years for the third quarter. It also had a fall on operating margins last quarter. Netflix blamed that on higher costs related to films and other programs. The streamer is under pressure from investors. Its shares have fallen 21 % this year.

1:21Investors are worried about increased competition. They also have some questions about Netflix's strategy after it failed to buy Warner Brothers Discovery. Netflix shares fell in after-hours trading following the earnings report.

1:39The Labor Party will name Andy Burnham to be the next Prime Minister today. In the run-up to this, major UK businesses say they've been calling Burnham's team, but no one's picking up. And they're worried that means he's not going to listen to their concerns once he's in office. Here to tell us more is the FT's chief UK business correspondent, Ashley Armstrong. Hi, Ashley. Hello. So what exactly have business leaders been telling you about trying to get in contact with Burnham's team? Yes, there's been a bit of a scramble to get close to power, which is all that chief executives ever want to do.

2:11And chief executives aren't used to being ignored either. So they've been sending their minions out and kind of saying, you know, we want to speak to Burnham, we want to speak to his camp. And the problem is, is that they and their trusted advisors don't even know who to contact. because let's not forget there's huge jobs where we don't know who's going to be running the show. And if you consider how small Burnham's team is, you can understand why loads of emails, WhatsApps, messages, carrier pigeons at one stage are being talked about, you know, are all going unread. That was going to be my next question, is how normal is this that, you know, the business community can't get in touch with the incoming prime minister?

2:51It sounds like it's not very normal. No, and what somebody said to me was, it's not only unprecedented, but it's also an unprecedented level of speculation about who is going to be in the cabinet. If you think in the run-up to a normal election, you know who the shadow cabinet is, you know who's going to be in positions, and people don't in this scenario. And also, Andy Burnham has been away from frontline politics for some time. He's known as a figure as the Greater Manchester Mayor, but he hasn't been in Westminster. He hasn't had a national interest. So people are trying to read the tea leaves, which is always quite dangerous business to try to understand what kind of things that he's done in Manchester might have an interpretation for kind of national policies as well.

3:31Tea leaves aside, what does Burnham and his team have to say about these complaints from major UK businesses? Well, what's really interesting is they haven't responded. It's fascinating. Somebody said about the whole WhatsApp kind of generation of being left unread. That's exactly what's happening to businesses at the moment because businesses low down on their priority list. They feel like that they've only just won this make-a-field by-election where they had to really speak to voters against reform, against a very populist party. They had to win that first rule and appeal to the general public.

4:02Now, secondly, Burnham has made it very clear that what he really cares about is devolution and spreading the wealth into every postcode and making sure that the whole of the UK benefits. So what somebody said to me was that there's going to be businesses playing a big part in Burnham's government, but it's going to be a different kind of business to the big business that is normally front of the queue. Do you think that things will change once Burnham is in office? And what are the consequences if it doesn't? I think there is a big difference between campaigning and being in power. And what we've seen is in Labour's overall general election campaign, they really sought themselves to be pro-business.

4:41And then when they got into office, there were lots of chief executives complaining about the fact that they used to be able to message Rachel Reeves about things and suddenly they were going ignored. I think it might be the reverse actually in this scenario, that whilst business might have been shut out from this early stage process while priorities are formed, then once Burnham is in and he realizes that there's infrastructure projects that need business, that engagement is going to kick off. I've heard a few comments today about, you know, it's slightly unfair to complain about lack of interest in government and business relations because he's not even PM yet.

5:14When he gets to that job and wants to know who the rest of the cabinet is, that's when the channels start opening again. I guess we'll find out more next week. Ashley Armstrong is the FT's chief UK business correspondent. Thank you so much, Ashley. Thank you. Lovely to talk.

5:34Big bond investors are expecting a big change from the Bank of England. They want the central bank to slow or even stop selling long-term government bonds by the fall. The BOE bought up a bunch of long-dated government debt after the 2008 financial crisis, and again after other global shocks like the COVID-19 pandemic. But now investors are increasingly worried that those bonds are driving up government borrowing costs and piling too much pressure on a very fragile gilt market. They expect the BOE's balance sheet to shrink 50 billion pounds by next September. That's according to the bank's most recent survey of market estimates.

6:10The central bank has been slowing its long-term gilt sales a bit, but if it continues to move at the rate it's currently going, it would take more than 24 years to fully unwind. The BOE declined to comment.

6:28Europe has built a pretty formidable footballing factory, and that was front and center this World Cup. But will any other region ever be able to rival it? The FT's Safiya Ahmed has more. The World Cup comes to a close this weekend. Spain will face off against Argentina for the title of world champion on Sunday. And looking back at this summer of football, it simply wasn't the tournament for underdogs. Western European nations dominated and it's been this way for a while. Since the 2006 World Cup, so the last 20 years, All the teams that have finished first, second, or third have been either from Western Europe or Croatia or Leo Messi's Argentina.

7:07That's the FT's Simon Cooper. He's been covering the tournament for us. And he's also the author of World Cup Fever, a soccer journey in nine tournaments. So Western Europe has 5 % of the world's population. The whole rest of the world has produced one team to compete with them. And that is a team with Leo Messi. And to be clear, Simon's talking about men's football specifically. Last week, we did talk about how migration and multinationalism have played a role in Europe's ability to turn out footballing stars like Kylian Mbappe, Romelu Lukaku. But Simon tells me that Western Europe has also flourished in another way.

7:42It starts really at grassroots. These countries for years have not actually been focused on how to win as many World Cups as possible. They've actually had a different goal, make amateur football cheap and widely available. What European countries do very well is they provide facilities. There are football fields everywhere. The coaches at small amateur clubs have diplomas. And that takes money to build that infrastructure. But you're not talking about, say, the Barcelona or the Manchester United Academy here. You're talking about getting millions of kids playing. And then it takes many years, really until adulthood, to discover who gets good.

8:21Just look at one of the stars of this tournament. My favorite example is Norway's Erling Haaland, who just played for his local club. I mean, they were a decent club, but it was just his local club and he was playing with kids of mixed abilities until he was about 16. So the European perspective has simply been keep football alive and well-funded for kids of all ages. Now, of course, to have millions of kids training and playing football from a very young age, that's going to require a lot of money. But it's interesting that there haven't been any other regions, at least in recent history, even wealthy countries like the US, that have been able to match the European men's footballing might.

8:57And Simon told me that's because of how exactly the game is taught. The great Dutchman Johan Cruyff said, football is a game you play with your head. Of course, you need skill, but you're making decisions all the time on the field as a player. And the main decision is, where should I be? Because for 88, 89 minutes, the individual player doesn't have the ball. And football is a game about space. It's about increasing space when you have the ball, shrinking space when you don't. He says that that concept needs to be taught at a very young age. What matters is teaching six-year-olds how to understand space, how to master the geometry of the field.

9:32And that's something that in America is just less developed. That knowledge isn't everywhere. That's not to say no other country or region could ever catch up. Even after the U.S. football team fell short of its World Cup ambitions, there are still eyes on America's soccer league to prove that it can become a powerhouse. And other countries are trying too. Especially Japan and the US. I think Japan is the country that's got closest. It has tried to learn in particular from Dutch coaches, but generally it has kind of studied, for example, the European pressing game. And so I think Japan with that attention to how the Europeans play and trying to adopt that style, and also, as I say, not just adopted at professional level, but all the way down the age pyramid, they might have the best chance.

10:21That's FT Life and Arts columnist Simon Cooper. He's also the author of World Cup Fever. We'll have a link to that in the show notes. I'm Safiya Ahmed reporting from New York City. This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing is produced by Safiya Ahmed, Sonia Hudson, Katya Kumkova, Fiona Simon, and Victoria Craig. I'm your editor, Mark Filippino. Our show is mixed by Alex Higgins and Sam Giovinco. We get help from Peter Barber, Michael Lello, David Da Silva, and Gavin Coleman. Our intern is Colvin Miltenberg. Our executive producer is Topher Forges.

10:55Flo Phillips is the FT's global head of audio, and our theme song is by Metaphor Music.

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