Alexis Ohanian’s New Stake in Chelsea Women FC 5/15/25

0:00Bring in show music please. Hi, I'm CNBC producer Katie Kramer. Today on Squawk Pod. Investing in women's sports, tech entrepreneur Alexis Ohanian buying a 10 % stake in the Chelsea Women's Football Club, one of the world's most valuable teams, and he's leveraging community. There's a new fan in town, and they're consuming via their phone first and foremost all the time, not just when their favorite teams are actually playing on the pitch. Plus the latest on the search for an American buyer for TikTok. And how artificial intelligence is changing what we share. I do think people underestimate just how much of the content they see online broadly is either outright AI generated or in some way, you know, semi-automated.

0:47And Warren Buffett speaks about his decision to step back, a mega merger at the mall, and President Trump's Mideast visit sparks deals and duets. A lot of ring kissing across the board over in Saudi Arabia. A lot of CEOs. It is Thursday, May 15th, 2025. Squawk Pod begins right now. Stand by Joe in three, two, one. His mic. Q. Oh, I'm doing this. Good morning and welcome to Squawk Box here on CNBC, live from the Nasdaq market site in Times Square. Here's why. I'm Kelly Evans. No, I'm Joe Kernan, but this is Kelly Evans. Good morning. Resplendent in blue. Becky usually does this part. I do the top part.

1:30Well, you have to carry more of the load. I do. Got to carry more of the load. Andrew's going to join us a little bit later. He's in a different time zone as he is often. Trump's latest. He's good at that. He's pretty good at that. He's got a nickname for everybody. He does. He's pretty good at that. You wonder what your nickname would be if he came up. I don't. You know what? That's why I try to fly down here. President Trump says India offered the U.S. a trade deal that proposes no tariffs. I don't think it would be anything about my hair because he's got, you know, he's got a lot. He would probably not be able to stop complimenting your hair.

2:04Well, and we both have similar issues, I think. What with your hair? I think we both are trying to keep it on top as long as we possibly can. You and him, you guys have the flow. I know I've been he got mad when his physician outed him on this thing called Propecia. And so we do have some things in common. TMI, look up the side effects and you'll see how important hair is to me. President Trump says India offered the U.S. a trade deal that proposes no tariffs. The president making those comments in a meeting with executives in Qatar on the second leg of his Middle East trip. Trump hit India with a 26 percent tariff last month.

2:46But then, you know, press pause like he did for tariffs on other countries. Trump also mentioned Apple at the event in Qatar and called out its CEO, Tim Cook. Apple has been working to diversify its supply chain away from China. I had a little problem with Tim Cook yesterday. I said to him, Tim, you're my friend. I treated you very good. You're coming in with 500 billion dollars. But now I hear you're building all over India. I don't want you building in India. You can build in India if you want to take care of India. And I also saw him say something about, you know, Jensen's here, the greatest CEO around, he said.

3:21I don't know where Tim Cook is. Yeah, he said that. Slightly different business model, though. It is, but there were a lot of a lot of a lot of ring kissing across the board over in Saudi Arabia. A lot of CEOs. Larry, Larry, what's his Larry Fink is there kissing? Well, he's everywhere, I guess. But it's not going to be Treasury secretary in a Republican. He might only have to wait a couple of years. What do you mean by 2028? I don't know. But I do know the amount of business deals announced in Saudi. It was like who compared it? They said it's like big oil to big tech. The gusher now flowing to a lot of U.S.

4:01companies kind of in that direction. Andrew's not here, but I feel like I have to say, yeah, but none of it's really real. So so that's I wonder about that. Right. Like, is it then you look at the share prices this week? I mean, some of it's real. Some of it's real. Some of it's already been announced. Some of it won't. Like it's not going to be a trillion dollars. The Saudis already know the amount of U.S. investment. I mean, who knows? Right. But the Saudis, the individual companies striking deals, you know, I go, OK, well, I guess if the Saudis want to spend that much of their cash at a time when oil is 30 dollars lower than they need.

4:32to balance the budget. OK, fine. Like, we'll benefit. But I thought it was quaint because they have a budget deficit. $70 billion. That's quaint. You know, they're starting to have government debt. Right. That's our deficit. What time is it? By 11, we'll be at, you know, $75 billion. Yeah. Goes back to what you were saying, too, about rates and, you know, how much of the increase is because of that. You know, it seems like it is. But then maybe it's just the fact that recession odds are now lower. And it doesn't help when rates go up because that just makes our deficit more expensive. That's what it keeps, you know, whenever it's like, oh, well, rates have been here before in the late 90s.

5:07Okay, well, we had a surplus. They can't go back there now. Now they're where they are. Not at$37 trillion. Yeah, it's another missile we can't buy or whatever. Dick's Sporting Goods. Oh, it's official. Okay. They are buying Foot Locker for$24 a share. Wow. Premium, big premium. Wow. Shares of Dick's Sporting Goods are down 13 % on this announcement this morning, and Foot Locker is soaring 74%. Dick says the deal will be accretive in the first full year after it closes, which the company estimates will be in the third or fourth quarter. They plan to operate Foot Locker as a standalone business and maintain the Foot Locker brands.

5:42They also expect some cost synergies,$100 to$125 million. Dick's is scheduled to report full first quarter results later this month. This had been rumored for the last couple of days or so. But as you can see by the market reaction, it wasn't taken completely seriously yet. And again, Dick's shares are down 13 percent on this. Look, we all know Foot Locker was not exact. I mean, they've had good times. They've had bad times. It's highly cyclical. It's volatile. They face headwinds. For dicks to double down like this on the mall footprint, so to speak, very, very interesting move, especially the timing with tariffs and all the rest of it.

6:16Foot Locker, they're buying it at a huge premium for$2 billion. I mean, it was a$63 stock in 2021. You know, where is it being acquired today? It's being acquired at 22. Yeah, 24. It was trading at under 13 before the acquisition. It was a$78 stock. And maybe Dick says it's opportunistic for that reason. So it's interesting, even with it now being diminished and not being that much of a - As a shareholder, why wouldn't you think you're catching a falling knife with Foot Locker? And why it doesn't Dick's - What does Dick's see? I don't know. I don't know whether - Maybe it works for them, I guess.

6:53They're going to have to make that case. Maybe they can make it work better than Foot Locker can on its own. Yeah. Very, very interesting. one of the bigger market reactions we've seen to a deal like this. And I haven't really even seen that many deals this year. So very interesting all around. Shares of UnitedHealth as well, they're down this morning. As Joe mentioned, investors reacting to this report that the company is now under investigation by the U.S. Justice Department for potential criminal Medicare fraud. The shares are down another 6 % after yesterday's 18 % drop. The Wall Street Journal said the investigation is focusing on the company's Medicare Advantage business practices, but the exact allegations are unclear.

7:29In a statement to CNBC, UNH called the journal's reporting, quote, deeply irresponsible and said it has not been notified by the Department of Justice of a criminal investigation. The company says it stands by the integrity of its Medicare Advantage program and shares of UNH, as mentioned. They were down 18 percent by the close yesterday. This was because the company suspended its 2025 forecast and made a surprise announcement that CEO Andrew Witte would step down, and now comes these revelations, according to the journal. And it goes back to what we were talking about with Medicare Advantage when it first started dropping, as you can see on that chart.

8:05Medicare Advantage makes the argument that they'll catch more things. But when you're in an elderly population, you can find a lot of things. some of it, I mean, you want to catch it all, but apparently there's some judgment calls that you can make that are expensive. There is one disease that is very rare that they find all of a sudden in a lot of elderly patients, and it's very lucrative for the insurer and for the doctors and everything, and it just makes you wonder. I mean, we hear about Medicare fraud. There is Medicare fraud. I don't know. I'm not calling this fraud, but you can game the system.

8:43One of the analysts who downgraded the stock yesterday, we spoke to him. He's from Raymond James. And he said, look, some of these issues go back years. And the quality of the earnings last year, he said, was not that great in the first place. There were a lot of one-time items and that kind of thing. So there are real questions about, you know, were they overbilling in the past? And those were Wall Street Journal reports in the past that were detailing a lot of that. And the recent problems with the results have been utilization has gone up. And then you throw in, you know, they got a frickin' opera or something for this guy, Luigi.

9:19Do they now? Oh, yeah. Or some kind of play or something. Some kind of Broadway show, yeah. And people are still, I mean, that's it. But you look at what's happened to the stock and some of the stuff that's coming out, and I would never, ever say, well, you know, that adds into these nut jobs that somehow justify what that guy did. But they'd probably say it does, you know. You know, that's why this whole thing is so unpleasant. You know, when Andrew Whitty resigned, it said, for personal reasons, I might get the hell out of UnitedHealthcare at this point, wouldn't you? The CEO of UnitedHealthcare?

9:53I know from people who work with the company, who said all of the executives. Let's be scared to death. Oh, absolutely. Absolutely. Yeah, we can't start. This can't start being, you know, like something that happens. No, no. That's the worst part about it, especially as more and more comes up. They would say it's on both sides, but you see a lot of violence coming. I'm not going to point fingers. Andrew is not here, Joe. No, I know, but there's a lot of violent talk coming around from one. You know, the left blames it on the right. I guess there's Proud Boys or something, but there's plenty of stuff and rhetoric.

10:28There has been for decades. You know, what Schumer said. We Supreme Court justices better watch out. You got, right, we're coming for you or something. I hope that when things like this happen, that people know, OK, dial it back. You know, things always get heated. Dial it back. When the Mets win, you actually can reverse. It takes years off. You can reverse graying hair. Maybe when the Mets aren't winning, billionaire investor, I guess they can go back. He looks great. He does. He does. I know. He looks thin, too. Yeah. Billionaire investor Steve Cohen. It's amazing. He sees the possibility that stocks could retest their lows from April.

11:10I don't want him to worry about that. It could go back to gray. Following the comeback over roughly the last month, though he said that potential situation would not be a calamity. Cohen making those comments at the Stone Investment Conference in New York. We've seen other periods where you've had significant drops and then the markets somehow rally. in a significant, I mean, this is unusual for something like this to happen where you drop significantly and rally back as quickly. I mean, the closest thing might have been a pandemic. But yeah, I mean, I still think multiples matter here and growth is going to slow.

11:51Cohen saying that he thinks that the markets feel toppy right now. Now he also put the chance of recession in the U.S. at as high as 45 percent. I think this is super significant, by the way. I mean, he has had so many right calls, including a couple of years ago when a lot of us cough, cough, were a little more bearish on things, including equities and the economy. And he was bullish and he was right. And so I hope he's not right this time around, but he's more right than wrong. So I'm glad he was out there talking about this again. Oh, no, don't tell me Jim Chanos is negative. CNBC did also speak with Jim Chanos on the sidelines of the Sohn conference.

12:26He is a longtime Tesla bear. I don't think he this. Let's stay with the micro. Here was his latest about shorting Tesla stock. A company whose earnings are declining, its revenues are declining. Its valuation is increasing because investors are pointing to robo taxis, autonomous robots. And then I joked this morning, you know, asteroid mining by robots. I mean, you know, the stories that keep building onto this company is people put hopes and dreams on back of one company and one entrepreneur, quite frankly, are just, you know, sort of getting excessive. On Elon Musk's Doge effort, Chanos also said he thinks the government savings that will be achieved will be fairly small compared with something like tax policy.

13:13Joe Dikechi was bullish on Bitcoin, but it was part of a we're selling strategy and buying Bitcoin kind of point he was making. Who was it that said we're going to probably retest the lows too? Ken Griffin said that too. It's notable some of the caution. I think that was prior to the Besson China trip. Tees will be next. Coming up on Squawk Pod, Reddit co-founder Alexis Ohanian, a tech and sports investor. He's a founding owner of Angel City FC, and now he's a minority stakeholder in the Chelsea Women's Football Club. But it's a new era for sports, and owners and players need to keep up with their fans.

14:03The younger generation, the digital native generation, is much more used to seeing and consuming sports, not just in real time, but also in highlights. They're talking about it on online platforms. And so I think we're going to see new monetization methods. Plus the bots that caused uproar on Reddit. The race is on to find a way to watermark AI content online. Someone with a ton of weight in the space is going to have to figure out how to do that because people need to trust what they're reading online to really make this whole social media thing work. More to come. We'll be right back.

14:39This is Squawk Pod. Up in Andrew, Hugh. You're watching Squawk Box on CNBC. I'm Andrew Ross Sorkin, along with Joe Kernan. Kelly Evans is with us hanging out today. Becky is off on assignment. We got a lot going on, though. Chelsea Women FT has a new minority investor, entrepreneur, Alexis Ohanian. He's now taking a 10 % stake in the team in a deal that could end up valuing the club at over 200 million pounds or about$265 million. Joining us right now is Alexis Ohanian, the founder of VentureFirm776, co-founder of Reddit. And it is great to see you, sir. I'm sorry we're not doing it in person.

15:16I just got to see you on Monday night at the Robinhood event, which I know you're on the board of. And you've done some remarkable work with them. So congratulations. But tell us about this. How did this come about? What's the back story? Well, you know what? Five years ago, I was out loud and proud saying women's sports was just dramatically undervalued. And that led me to, of course, become the founding control owner of Angel City FC. And I told folks I was just the start. And so I'm really proud here. You know, I set my sights on the other side of the Atlantic. And, you know, if you just look at the trophy case, Chelsea FC really represents excellence.

15:52The top, top tier of women's football, women's soccer. And I'm just grateful to play a part now as a board member and a minority owner and really make it America's team. If you're going to have one team overseas as an American women's soccer fan, we hope it's Chelsea and we'll do the work to build it up and let folks know. In terms of the way you see all this going, there's so much money pouring into women's sports right now. How quickly do you think that the valuations will catch up, frankly, with the actual economics of the business? Because there are people in the business who I've been hearing are saying, look, this may work out, but it's going to it may take a little bit longer because the prices have gone up in a big way over the past year and a half.

16:35Yeah. Look, valuations have grown, but I think they're commensurate in the reality that this industry had been undervalued for far too long. And, you know, it's nice to see that the momentum has shifted so significantly. Brands are just starting to wake up to the value of investing in women's sports. And I think, look, traditionally media deals do drive a disproportionate amount of the revenue for professional sports teams. And that will take time to build up those media rights deals. You know, they get they get sold on cycles. And and I think we will see those continue to grow commensurate with more and more fans tuning in and watching.

17:10But, you know, the reason I got so fired up about women's sports, aside from obviously being married to the GOAT Serena, the business of it was appealing to me because as a social media guy, I look for heat online in the free market of attention. and you look at things like follower counts, ball don't lie, right? If you look at the follower count of the Chelsea Women's Football Club, that's 4 million people. 4 million people have signed up to say, I love this team. I love this club. I love these players. Show me more. And when you look at that kind of intentionality, when you look at that kind of community impact, there's heat.

17:42And there's an opportunity for brands to partner. There's an opportunity to keep growing the fan base globally. And that was something special. You could look at that and think, all right, if this were any other type of brand, this was any other type of platform, there's a lot of revenue opportunity there. And so, yeah, these these valuations, I think, have grown quickly. But I absolutely believe in them. And we'll see billion dollar clubs in women's soccer one day. How much how much do you think this is ultimately going to be, though, about television licensing deals and what that ultimately looks like?

18:14And I ask because right now, if you're the NFL, you're the NBA, maybe for the MLB, we'll see you're winning. Other sports, it's actually a lot more complicated than that these days. And also, as you talk about social media and the follower count, I would just wonder whether we actually think people are going to watch games in their entirety. Maybe when you get to the playoffs, people do. But is it going to change? Maybe does it become a ticket sale game or is there going to be some economics on TikTok or an Instagram that we don't know about yet? You know, I'm glad you brought this up. I was an early investor in the TGL Tigers Team Golf League.

18:50I bought the first team in that league, L.A. Golf Club. And, you know, this was very purposely built for a younger generation and it had tremendous success in ESPN. I think first and foremost, yes, view counts matter in traditional television because that's where those traditional media deals come from. I also believe this generation of sports fan, the younger generation, the digital native generation, is much more used to seeing and consuming sports, not just in real time, but also in highlights. They're talking about it on online platforms. And so I think we're going to see new monetization methods for sure.

19:22And you mentioned a bunch of amazing legacy big four leagues. You know, they in a lot of ways have this sort of lock in. One of the biggest advantages to investing in women's sports and emerging leagues is that it's a green field. You can make decisions from first principles using what are the best ways to reach fans and drive revenue. And so I would expect some more creative ways as the sort of traditional television dollars do take time to come in. I'd expect some more creative ways to start building brands globally to drive more revenue. But, yeah, there's a new fan in town and they're consuming via their phone first and foremost all the time, not just when their favorite teams are actually playing on the pitch.

20:02I was just going to pivot real quick to the idea of tech, which is AI and how you actually think. I mean, we talk about social media and sports. How do you think AI is going to affect all this? Is there something in terms of how you think stuff gets delivered to us, how we interact with players, with teams? I always feel like you're sort of thinking out a couple of years about where this all goes. Oh, yeah. No, I live. I try to live 10 years in the future. That's how I can do this job well, a very, very early stage investing entrepreneurship. So I'm glad you asked. I think every major pillar of entertainment we're going to see upended through AI in various ways.

20:37You know, movie crews and sets are going to get smaller. You know, there's still going to be a room for Taylor Swift. My daughter is still going to want to go to see that concert because that's a religious experience. But sports is so powerful and frankly impervious to the AI revolution because we will never we'll never take our kids to go watch robots play golf. Right. That's not interesting. Sports is a fundamentally human experience. And as I actually see the world 10 years from now, every screen we see will get so much better at showing us what we want, when we want it, how we want it. You know, Joe, if you want to watch Iron Man and be Iron Man, you know, you'll get to see versions of that in the digital future.

21:15But sport needs to be human. I was thinking about some golfers and there are some robot robotic. No, no. But then I thought they're not like Bryson. I think that guy is like a mathematician or something. But then you see when he needs heart, then he's human again. They're not robots. And to that point, Bryson's done an amazing job going direct on YouTube to show his personality. And he's running the same playbook of YouTube creators. And TGL's done a great job micing those guys up, creating that live moment and humanizing a lot of golfers that on the tour can't really be their full selves. So I'm incredibly bullish in this AI future for sport because it is so fundamentally human.

21:56AI is going to make it better to be a fan. It's going to make it better to train. It's going to make it better to do so much other stuff. But we still need to watch humans doing this amazing skill and craft. And I'm looking forward to it. I think it's a bright future for our kids. You're not afraid that, you know, we keep hearing these people warning about AI, you know, and all the existential dangers and challenges. And, you know, even yesterday we spoke with Klarna and the CEO said their work, their headcount has shrunk by 40 percent as they implement AI. You know, the people that they still have are more productive.

22:25But so there's a lot of changes coming. Oh, yes. No, those are real. And I think every CEO, especially if they're building software, right now we're seeing this dramatic commoditization of software. It is getting easier and easier and easier to build high-quality software. Writing code is going to be one of the first areas that AI is going to be able to do better, cheaper, faster by 10x, 100x. And you've seen in just the last 12 months, I think any CEO with their salt has to be making hard looks at how they've built out their teams and what they're doing. It gives a tremendous advantage to startups because we've never seen the kind of revenue growth that we're seeing now for the companies we're seeing at 776.

23:03What kind of industries? What kinds of any across the board? Pure software businesses. It doesn't really matter if it's a software as a service business, a marketplace business, consumer. we are seeing companies getting to millions and then tens of millions and in a couple cases, hundreds of millions in revenue with teams of a few dozen people. And that is going to be the new normal in software development. And it's going to affect various industries differently. But for sure, the ability of teams to function more like elite Navy SEALs, small, well-coordinated, deep culture, deep trust with these AI tools is going to be able to outperform the sort of larger, slower Navy of thousands.

23:43Can you look at 10 years and tell me if I'm still going to be Googling? Wait a minute. I'm not Googling right now. Are you chat GPTing? I'm doing one of those. Andrew taught me in a chat GPT. It was easy for me to just use perplexity, but I'm never hitting Google anymore. Am I alone? It is. I think right now, I still wouldn't count out Google, but right now. They've got to change. What's ironic, too, is a lot of developers will say Gemini, actually, from a model standpoint, is really punching above its weight, at least in terms of public awareness. But, look, I think ChatGPT actually recently surpassed Reddit in terms of daily active users.

24:22600 is a monthly, I think. But, yes. It's huge. They are huge. And that rate of growth, that tells me that consumers have sort of mentally shifted. and search, I think we all would agree, you know, the list of blue links where... The first eight are all ads that are not what you're trying to find. Not a great user experience. So Google pioneered this technology, ironically, right? And they had this innovator's dilemma and didn't lead the way on it. We'll see where that goes. Google still has plenty of lines of revenue, but I do think... I wouldn't be paying what I used to pay for search words and stuff.