Why Are Millionaires Moving Abroad? + The Biggest Deals in Podcasting

26:11Again, speaking for a friend. No, Dubai is actually quite liberal. And well-run. And it just represents opportunity and more economic security for young people. So it doesn't surprise me. What's surprising is that people used to move to a different city or whatever. The fact that there's sort of these international relocations now. I do have a couple of friends who've relocated. To the Middle East? Dubai. So my friends who've already made it are relocating to Portugal to become tax pats and just hang out in Qashqais and live nice lives with their kids. My friends who are kind of in their 30s and on the upswing and have a small business are moving to Dubai to try and make more money.

26:52Sort of similar. I mean, I kind of did the same thing. I moved to Florida thinking, okay, it'll be a better quality of life. I'm massively going to cut my burn by 40%. And I'm going to reinvest my 13 % a year on my top line from tax savings and investments. But what you see is young people are becoming bolder. More people have passports. More people are less intimidated by moving and they feel like they can stay in better touch with their family with FaceTime. They're just not as intimidated. And Emirates has now kind of opened up the region. I mean, flying 14 hours on Emirates is like flying two or three hours on American Airlines, right?

27:25It's just about the same level of trauma to your system. It's such a pleasant way to fly that I think it's really interesting. I think there's just some core investments, just as we were talking about how powerful an investment in a university can be. I think one of the best investments the UAE made was in Emirates Airlines. It just sets this tone that, wow, this is an amazing country. And I don't mind going there because getting there is just so easy and so nice. And the airport is so. By the way, one of the best meals I've ever had is at the Doha airport. You don't usually think about it. I got a facial and an amazing meal at the airport in Doha.

28:03That's not typically. By the way, go to an airport if you really want to. Your life is ridiculous. If you really want to be radiant and help with the pores and look younger, go to an airport for a great cosmetic treatment. Anyways, I think it's interesting. And I really – have you been to Dubai? No, I haven't. Yeah, it's sort of like Vegas without the charm. I don't love Dubai, but it's impressive what they have built there. also uh the it's it's kind of part of a trend around passports have become the newest luxury item where people are starting to buy passports so they kind of have a go bag um i had to jump through all sorts of hoops to get a tech visa here a tech talent visa which isn't easy at my age given i don't know how to turn on my phone um so i'm i got a five-year visa but these places you can basically buy citizenship.

28:58Let me ask you this. If you felt, so you make a certain amount of money, if you felt you could make the same money, have the same or lower cost of living as you do in New York, but save 30 % of taxes, would you consider moving to Dubai? I would certainly consider it, yeah. But I think I'd need to be making a lot of money such that I can be kind of at the very, very tip top of the hierarchy in Dubai. I think it wouldn't be very, When you say America is a terrible place to be poor and a wonderful place to be rich, I'll bet that's even more true in Dubai. So I would have to think about that. But on this golden visa point, you mentioned this is similar to you establishing residency in Florida.

29:43It's different because anyone can do that. And the difference that we're seeing here and the trend that we're seeing around the world, you mentioned Portugal. Portugal is one of the biggest countries for these golden visas, and now it's becoming the UAE. And basically what a golden visa is, is it says if you pay, you get to come and live here. So in the UAE, the rule is if you buy a property worth at least 2 million dirham, which is around half a million US dollars, you get a visa. and this is the case in in in many countries actually over 80 countries today offer golden visas some of them offer golden passports which means that you can literally just pay to become a citizen and at the moment uh demand for golden visas is up 15 in 2024 so it's this is a new phenomenon i mean i'm sure this has existed in various forms throughout history governments trying to adjust their policy to attract wealthy foreigners.

30:52We've talked a lot about how the UK has done that for a really long time. But golden visas specifically and golden passports are on the rise. And I look at this trend, and to me, it's concerning. Just the idea that we are moving to like a pay-to-play citizenship model, where it doesn't actually really matter what your nationality is. It doesn't really matter if you know anything about the culture. You're not taking like a nationality test. You're literally just paying money. And they say, okay, come in here. And now if you live in the UAE, as you mentioned, you pay very little in taxes. No, you pay zero in taxes in the UAE.

31:27There's no income tax, no inheritance tax, no estate tax. And now everyone's moving there and they're just paying for it. So are you concerned about this in the same way that I am, that we are just letting people pay to live wherever they want. I'm not. Just as I think it's good that Texas competes with California and that California will have to get its shit together and offer its taxpayers better value at some point. So in 2024, the UAE will attract the most millionaires, followed by the U.S., Singapore, and Canada. On the flip side, China, the U.K., and India will lose the most. I think that competition is really important.

32:03I think that nations competing against each other to attract people is really important. I think that China will probably have to keep a check on, somewhat of a check on human rights or the way they treat people because I read some crazy stat that two-thirds of millionaires in China have either left or are planning to leave. Right. In China and Russia, all the rich people are leaving. Yeah. Supposedly the thing that's really going to fuck the Russian economy is just the brain drain. And so, you know, ensuring that your citizens are happy, otherwise they're just going to peace out, I think that's a good thing.

32:37I think that competition, I think it'll inspire the UK to try and figure out. And it's not only low taxes, it's, and we were talking about this before, I don't think New York has any plans to lower its tax rate. And it doesn't need to because it offers an amalgamation or an alchemy of culture, grit, and opportunity that's worth it. And I think companies and countries that don't make it worth it, that have a mix of high taxes and low opportunity and low human rights or modest or mediocre freedoms, people are just going to leave and go somewhere else. It is a bit disturbing that millionaires get to do whatever they want and buy citizenship.

33:17But it's the financialization of everything. Welcome to the real world that everything is about money increasingly. And it'll create a more competitive environment. but I think on the whole, countries competing against each other for its quote-unquote most productive citizens or its wealthiest citizens, I think that is primarily a good thing. But it's competition to serve such a small amount of people. I'll just give an example of where this is happening, which is the UK. You mentioned the UK is at the bottom of that list. It's seeing the greatest outflows of millionaires. And the reason behind that is that, as we've discussed before, the UK used to be sort of a tax haven for wealthy foreigners because of this thing that we've talked about called the non-dom status.

34:08It's a tax classification for wealthy foreigners who are living in the UK, and it basically exempts them from a certain amount of taxes. And we can go into the details on what exactly those exemptions are. But the point is, wealthy foreigners live in the UK, and they love it there because they get to enjoy all the nice things. And also, they get to pay less in taxes than regular UK citizens as a percentage of their income. So the UK government has recently decided to scrap that. So non-DOMs, or wealthy foreigners, will now be taxed the same as everyone else. And when that happened, as I'm sure you heard from a lot of people in London, a lot of wealthy foreigners were like, oh, this is terrible.

34:50We're moving. You know, this doesn't work for us anymore. My instinct when I heard those rumors was that it was kind of similar to Miami. It's kind of bullshit. They're saying, oh, this is terrible because they just want to put up a stink and maybe get that tax policy reversed. But ultimately, they want to keep going to 5 Hopford Street and running into you at Maison Estelle, et cetera, et cetera. But then I saw the data, which is that the UK is expected to lose 10 ,000 millionaires this year, which is the highest number ever. And this new economic analysis came out saying that because of the amount of non-doms that are leaving, the Treasury is expected to actually lose tax revenues, expected to lose£1 billion.

35:35And this whole thing was supposed to increase revenues. But everyone's actually leaving. And apparently, if we look at the data, they're literally moving to the Middle East. So how are governments supposed to thread the needle here? Because it's not that Britain's implementing unfair tax policy. It's very fair, very moderate tax policy. But it's just that somewhere else, the tax policy is just preferential to rich people. So is it just sort of kind of a race to the bottom of who can cater to the rich as much as possible? So a lot there. The first is I want to acknowledge that I like your mentality in the sense that, okay, when the data changes, I change my mind.

36:17And I had the same view as you. I have a close friend here in the UK, total baller, does really well, and has residency in a low-tax domain. And then when you heard about the non-dom thing, you started kvetching that I'm leaving. This is going to be a huge hit to me. And I'm like, boss, your kids are in school here. You love it here. You're not going anywhere. And I was right on this specific instance. But for people who don't have kids, for people who it's, you know, a savings of tens of millions of dollars, the data you just put forward is really stark. And the fact of the matter is, if this tax policy meant to increase the treasury is actually going to diminish it, then it was the wrong policy, regardless of what you think of the morals of it.

37:00So what needs to happen? I think that in general, you need a few things to happen. The first is I think there has to be a tax policy that is a multilateral trade agreement, and the U.S. has to lead it because the U.S. is the only one that has kind of the firepower to say, unless you cooperate, we're not going to give you access to the dollar. We're not going to give you access to CFIUS or not CFIUS, whatever the credit card trade. I mean, the U.S. can kind of impose a sanction on anybody, and it kicks the shit out of it. The U.S. can put almost any country, if not out of business, it can make them much less wealthy if it wants to.

37:35And they flex that same muscle. You had a lot of U.S. corporations doing reverse mergers and relocating their corporate headquarters such that they could not pay American taxes. So Janet Yellen and the president said, no, we're going to implement a 15 percent AMT minimum tax that regardless of where your quote unquote headquarters are, you need to pay at least a 15 percent corporate tax. And then they forced everyone else, including Ireland, that was saying, we'll do it for eight to do that. Otherwise, we're going to put you out of business. We're going to start with a tariff for UAE. Right. So you're going to have to have, I think, some sort of intercontinental or multilateral agreement around taxation.

38:12In addition, as a general rule, the philosophy I would implement around taxation is the following. If you're Jeff Bezos and you've aggregated$160 billion in wealth in Washington as a function of the great junior colleges there, the great public schools, the University of Washington, the Seattle-Tacoma Airport, the unique culture of innovation there, and then you decide to peace out for Florida to, quote-unquote, spend more time with dad, and you're not going to give back to the infrastructure you leveraged to become one of the wealthiest men in the world, boss, that dog just won't hunt. The amount, the accretion of wealth needs to be, the taxes you pay on it need to be based on where you accreted and built that wealth.

38:59It's the same bullshit all these VCs who claim that they hate San Francisco as pulling, but on an international scale. Galloway 2024, new tax policy. You heard it here first. No, but I need to be president of the world. Yeah, exactly. General consulate of the solar system. We'll be right back after the break with a look at a few mega deals in podcasting.

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40:59We're back with Profitry Markets. Podcasting deals are back and bigger than ever. Over the summer, Alex Cooper of the Call Her Daddy podcast signed a three-year contract with SiriusXM for$125 million, jumping ship from Spotify. Meanwhile, Travis Kelsey and Dax Shepard struck deals with Wondery for$100 million and$80 million, respectively. And Joe Rogan renewed his contract for$250 million. Scott, 2024 might be the year of the podcast. What are your reactions to these new podcast deals? My reaction is fourfold. The first is Shama. The second is Llama. The third and fourth are Ding and Dong. We're rich, Ed.

41:43We're rich. Boom. We're each going to have a Ferrari or more likely, I'm going to have two Ferraris. Yeah. Then I'm going to buy you like a Toyota with like leather seats. I'm going to be renting a Ferrari from you. There you go. Yeah. I'm super, I think a lot about this. and this is super exciting. And a few things are going on here. One, podcasting is one of the few growing ad-supported mediums. And the key there is ad-supported because the trend around all media has been to go behind a wall, whether it's New York Times or Netflix or HBO or the Financial Times. The best content is basically going subscription and ad-free.

42:26Now, what does that mean? It means that if you're Pepsi or Lexus, you're becoming increasingly desperate to find content that people will endure while they pelt you with the Lexus September to Remember event. By the way, eating the clam chowder at the Lexus September to Remember event wasn't a good idea, Ed. It wasn't a good idea. Anyways, that makes me happy. So, all right, back to our program. So if you have a vehicle, a media vehicle, such as the one that the two of us are on right now, that people are willing to endure ads on, that asset becomes more and more valuable because there are few and fewer of them.

43:06This is why you've seen an explosion in the value of sports franchises because they can garner TV rights or sell their TV rights and people are still willing to endure ads in live sports. They're not willing to endure ads in original scripted drama anymore, but they are willing to endure ads so far in audio, specifically podcasts. So you have seen a dramatic uptick this year. We've seen it in our numbers in advertising. And so what you see is a few of the bigger players, Sirius, Spotify, Wondery, who has Amazon, iHeartRadio, Vox, who we distribute our podcasts through, they are paying up because their valuations, if they can show growth in an ad-supported medium, that creates a lot of shareholder value.

43:55And podcasting has also evolved. It used to be celebrities. The era of sign up the Obamas and Prince Harry and Meghan and pay them 10 million bucks for them to do nothing, that's over. But these folks who are proven commodities, who have big audiences that are growing, that ring the register with advertisers, they're getting bigger and bigger deals. Now, these deals are probably a bit misleading because let's break it down. Armchair expert,$80 million. That's Dax Shepard's podcast. That's Dax, yeah. But let's assume it's four years. That's$20 million a year. I bet there are revenue guarantees in there.

44:35And so it's not, you know, they all want a headline number that's really big. But I would bet that the folks at Armchair Expert gave Wondery a business plan and they said, fine, we believe you and you need to hit these numbers. And if you do and you continue to grow 20 or 30 percent a year, you're going to get 80 million total over four years. This is, I got to be honest, this is really exciting for us. We're peaking at the right moment. The ProfG Enterprise, you know, markets, conversations, this pod is growing, you know, 20, 30 percent quarter on quarter. The other pod, Pivot, is a juggernaut.

45:11And our deal with Vox is up in May. So we're out there positioning ourselves. And my guess is we'll probably end up staying with Vox because we like working with them so much. But oh, my gosh, it's going to cost you, folks. It's going to cost you. Yeah, so this is the ultimate question. What is a multi-year contract with Scott Galloway and Ed Elson? What is that going to be worth in 2024? All the chickens, ale, and cialis that daddy wants. I don't know. I've done a bunch of deals directly with firms. Money is meaningful to me right now. It's not profound. I'm going to call profound for me, but keep going.

45:50um and uh in terms of a number i haven't thought about a number yeah you have i haven't thought about a number i'm willing to share i basically like to just i'd like i'm building a pool in my new house i'd like to fill it with cocaine and i don't know how much that would cost i don't know how much that would cost and i also want to be married another four or five times to people from eastern europe i'm curious what that would cost yeah yeah you got to factor all of this in no this is going to take some real money plus i need a scrotum lift i'm getting more and more botox all the time i have it look it's not it's not uh it's not cheap not cheap not cheap it's not cheap i gotta pay you guys i gotta get a scrotum lift at the doha airport yeah best facial i've had well just on this point of um subscriptions versus ads so you know you're pointing out that ad spend is increasing on podcasts and here's some data ad spend increased 22 percent this year according to one research report on all podcasts spotify says 2024 will be the company's biggest year for podcasting and on a separate note regarding subscriptions 62 percent of consumers who use streaming services report subscription fatigue and that's up from 46 percent in 2020 So ads are kind of becoming king again, certainly the podcast world.

47:11And you made this point that listeners are willing to endure them. And that is something that we should zero in on because ads are increasingly dominating this space. In 2021, ads took up an average of 7.5 % of total podcast show minutes across all podcasts. And today that number is 11%. So it's grown very significantly. We are hearing more and more ads in our podcasts. Our listeners, I'm sure, will be feeling this too. We are definitely not bucking that trend. And there might be a concern soon that podcasts similar to TV are just too ad heavy. It just becomes insufferable. So where do you stand on that issue?

47:58Are you concerned at all about just ad fatigue? So about four years ago, every three months, we would have a conversation, a serious conversation around taking PropG and Pivot behind a paywall and putting the No Mercy, No Malice newsletter there and just saying$100 a year for all of it. And there's something that's very attractive about it. No ads, focus on the content, have a customer base that is really into it. Kind of Sam Harris has sort of forged this model. I think Sam Harris probably has, you know, three or four hundred thousand subscribers paying a hundred bucks. Do the math. He's making a shit ton of money.

48:31He's very happy. He doesn't have to go to the lowest common denominator or read an ad about, you know, for some crypto platform or whatever. so there it was really attractive but i we were smart enough to figure out i thought you know what i do think that these advertisers are going to need places and everything is we're going to go the market is never the market never finds a balance i'm like subscription is just was the right move 10 years ago it's not any longer because there's still too many advertisers that need to reach people and that number 23 growth i think that means podcasts are growing faster than Alphabet right now.

49:06I mean, that is 23 % other than meta and TikTok. I think that means podcasts are the fastest growing ad-supported medium in the world right now. And so everyone has their greed glands going and their checkbooks out. At some point, we'll hit a limit in terms of ad fatigue. The thing that'll happen that'll ruin it, if you will, or not ruin it, but change it, is right now, it's pretty easy to skip an ad. At some point, advertisers are going to start tracking ads listened to. And that will probably change or force podcasts to reduce the number of ads such that people don't immediately get fatigued and start skipping everything.

49:42Also, what's different or unique about this medium is the host readover. We read all our ads. And it's been shown that when I say I have a Hastens bed, is that what it's called? Hastens? Hastens. Hastens. Hastens. Hastens. Hastens. Hastens. Hastens. Hastens. Hastens. Hastens. They're nice, expensive beds. Yeah, it's a$12 ,000 mattress. Anyways, they're an advertiser, and they were kind enough to invite this into their store to try a mattress. And I'm like, I'm not going to go into some strange store and lay down. That's supposed to be a feature? Anyways, it ends up, which I never do. I think I spilled some rum in my bed or something.

50:18And for the first time, I took the cover sheet off, and I see a Hastings logo. And I'm like, oh, my God. I buy the Swiss bitch of a mattress or whatever. It's a Northern European mattress that has like Swedish gnomes with freakishly small hands sewing this thing. And it is a great mattress. But in the next ad read, I will say I have this mattress and I love it. And the advertiser loves that. And so do listeners. The host readover is much more effective because people, when they hear the continuity of your voice, if they're on your pod, it means they sort of trust you and they're sort of interested.

50:52But this is a medium. The ad market needs a place to find consumers. This medium is going faster than anything but all but the strongest digital platforms right now. And people are breaking out their checkbooks. It's a great time to be in podcasting. I'm manifesting a$60 million deal next year. That's what I want. You know what's funny you said this? Yeah. I went on. I'm fascinated by ChatGPT and Claude and AI in general. I went on and I uploaded our numbers. I uploaded our downloads, our numbers, our revenues. This is the guy who said, I haven't thought about it. I just want to be happy, Ed. Go ahead.

51:31I just want to make other people happy. I just want to be healthy. You know, I'm rich in terms of the number of people who love me, Ed. That's how I count them, Ed. Three different AI assistants to help them think about it even more. All right, shut the fuck up. Anyway, so I uploaded all the data I had on our pods, and I said, please look at all these different deals. These are the potential partners. This is when our deal is up. please provide me a range of a likely size of a deal. And both of them came back with nearly the same number, which I thought was really interesting. And after the deal is done, I will disclose what AI projected we were going to get and what we actually got, but it's going to be very interesting.

52:10I hope it's big. I really hope it's big. Let's take a look at the week ahead. We'll see the consumer price and producer price indices for August, and we'll also see earnings from Oracle, Adobe, and Kroger. Do you have any predictions for us, Scott. So it feels as if the worm has turned against big tech. The CEO of Telegram being arrested in France, Twitter being banned in Brazil, Google being found guilty by a court of monopoly maintenance, the DOJ sending a warning letter or firing a flare across the bow of NVIDIA. Apparently that wasn't true, by the way, the NVIDIA subpoena. That's what NVIDIA said.

52:46NVIDIA is saying they didn't hear from them. And then later today, though, didn't they say that they've been in touch or something? I know they initiated an investigation. The whole thing is very weird. But I mean, they're suddenly investigating NVIDIA, so I think what you're saying still remains true. Don't get in the way of my narrative with data and truth, all right? Anyways, I think the worm has turned against big tech and this bullshit that, oh, the screams of free speech. So news alert, crime is not speech. If, Ed, if you and me owned a hotel and we knew that there was trafficking and there was child abuse taking place and illegal drugs being sold, and the authorities contacted us and said, we know this is going on there and we need your help, and we stuck up the middle finger and said, no, it's free speech, we would be in a world of hurt.

53:32crime is not speech. And people have had it with these folks believing what everyone has been telling them from the stock market to a fawning media to bought off senators and commerce people that somehow they are not subject to the same standards of decency or care for the commonwealth as every other company and every other individual. So my prediction is the following. In the next six months, you are going to see a high-profile tech executive when he or she lands in their favorite vacation spot, cuffed. The world has had it with these guys. And we're going to start to see more local enforcement agencies say, well, if you're in any other industry, we're going to arrest you.

54:10So guess what? We're arresting you. This episode was produced by Claire Miller and engineered by Benjamin Spencer. Our associate producer is Alison Weiss. Our executive producer is Catherine Dillon. Mia Silverio is our research lead. And Drew Burrows is our technical director. Thank you for listening to Prof G Markets from the Vox Media Podcast Network. Join us on Thursday for our conversation with Lynn Alden, only on Prof. G Markets.

54:58And the dark flies In love

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