Knicks Fans Priced Out of MSG Head to Texas for NBA Finals

0:01Meghan Bobrowsky:Ready to soundtrack your summer? With Red Bull Summer All Day Play, you choose a playlist that fits your summer vibe the best. Are you a festival fanatic, a deep end DJ, a road dog, or a trail mixer? Just add a song to your chosen playlist and put your summer on track. Red Bull Summer All Day Play. Red Bull gives you wings. Visit redbull.com slash bright summer ahead to learn more. See you this summer.

0:30Meta starts courting business customers with its new AI agents.

0:34Meghan Bobrowsky:Meta is a consumer ads business, and this is really them saying we're going after the enterprise business. Plus, federal regulators are investigating whether former Congressman George Santos traded illegally on prediction markets. And the NBA Finals tip off tonight, but high ticket prices have spurred some Knicks fans to see their team far from home. It's Wednesday, June 3rd. I'm Alex Osalev for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. We're looking today at some retail earnings. Macy's has raised its outlook for the year after its sales for the most recent quarter rose 1.8 percent.

1:15A key retail metric, same-store sales, rose 3 percent. To talk about what's driving this growth, I'm joined now by Suzanne Kappner, who covers retail for The Journal. Suzanne, Macy's is in the middle of this turnaround plan under its CEO, Tony Spring. He is focused on improving the merchandise they have on sale. They're adding more higher-end brands. They're sprucing up stores. What do these quarter's numbers tell us about that push?

1:37Meghan Bobrowsky:Well, they're building on some recent success. For Macy's overall, this was their fourth consecutive quarter of positive same-store sales, which is impressive for a department store. We all know how challenged department stores have been. So it's really a big boat. He's trying to turn around, and we are starting to see the fruits of those labors. In the earnings, Bloomingdale's was a standout. Its comparable sales rose more than 10%. Is this another example of the K-shaped economy where higher-income consumers are powering this growth? That's definitely part of it. Bloomingdale's has also benefited from the bankruptcy of the parent of Sachs and Neiman Marcus.

2:14Meghan Bobrowsky:It has also been doing a lot of work to improve the shopping experience. It's been getting new brands. They just added Chloe ready to wear. They have a big Prada shoe department in their 59th Street store. And Tony told me this morning that he's really seeing customers willing to pay up when the quality is there. And that means real leather jackets over vegan leather or linen pants over cotton. Zooming out a little bit from Macy's, we've been hearing pretty great earnings from several retailers this quarter. We were talking on the show yesterday about Victoria's Secret. That is all, despite consumers saying they're, like, feeling pretty down about the economy.

2:54Is there a broader retail renaissance going on in the middle of all this?

2:58Meghan Bobrowsky:Some of these retailers are really just hitting the mark. Victoria's Secret is another turnaround story. And they have a CEO who's been working really hard to re-spark that sexiness that the brand used to have without being off color. And they've come out with some new products that have really connected with shoppers. You've seen that with the Gap brand as well. and some of it may tie into this 90s nostalgia that's fueling spending. J.Crew happens to be private, but they're benefiting from that too. Retailers that get it right, meaning they have the right product at the right price at the right time, are doing well, even if there are some broader challenges in the economy.

3:36That was WSJ reporter Suzanne Kappner. Thanks, Suzanne. Thank you. Macy's stock rose 0.6 percent. The Journal has learned that Pershing Square, Bill Ackman's hedge fund, is set to make some$600 million on his investment in Universal Music Group. The firm is selling its remaining stake in Universal after the world's largest music company rejected its recent takeover offer. In markets, stocks reversed course today, retreating from yesterday's record highs. The Dow fell the most, closing down 1.2 percent. Oil prices rose, with Brent crude futures up almost 2 percent. Traders are losing faith that a deal to end the Iran war will materialize quickly.

4:16And Bitcoin fell for its fourth straight day today, trading over just$65 ,000 at 4 p.m. Eastern. One thing pushing its price down? Earlier this week, Strategy, the largest corporate accumulator of the digital token, sold a portion of its massive holdings for the first time since the depths of the crypto winter in 2022.

4:38Meta is officially getting into the agents business. Today, the Facebook parent launched an artificial intelligence agent for businesses on its WhatsApp, Instagram, and Messenger services. Meta was testing the agent before today's launch, and the company said one million businesses are already using it. Megan Bobrowski covers Meta for the journal and joins me now. Megan, what can this AI agent tool do?

4:59Meghan Bobrowsky:So it can answer customer questions. It can talk to customers for you. Meta says it can also book appointments for customers, and it can close sales. In the future, Meta wants us to basically run your whole business. So doing stuff on the back end, syncing your calendars, providing competitive intelligence, market insights. So sort of taking it one step beyond this customer support agent and actually taking a more proactive role in running the business. They already have 200 million businesses who use their WhatsApp business app. So from that perspective, it's not entirely new, but certainly at scale, you know, Meta is a consumer ads business.

5:41Meghan Bobrowsky:And this is really them saying we're going after the enterprise business. Megan, on the show, we've been talking about rising AI compute costs and how some businesses are even starting to ration their AI use because of it. Could that happen with these AI agents too? The way it's set up is if you're a smaller business, you just pay a set subscription fee. If you're a bigger business and you want to do some more advanced things, Meta is planning to charge them based on token usage. So how much they're using the services will directly correlate to how much they have to pay for that. But Meta's ultimate goal is to have agents for all of their users.

6:18Meghan Bobrowsky:They have 3.5 billion daily active users. And now they want their businesses they work with to also have an AI agent. That's a lot of potential compute that Meta is going to be on the hook to provide. That was The Journal's Megan Bobrowski. Thanks, Megan. Thanks for having me. Coming up, why federal regulators have opened a probe into former Congressman George Santos, and why some fans of the New York Knicks are booking flights to Texas. That's after the break.

6:47Meghan Bobrowsky:Study. And play. Come together on a Windows 11 PC. And for a limited time, college students get... The best of both worlds. Get the Unreal College Deal. Everything you need to study and play with select Windows 11 PCs. Eligible students get a year of Microsoft 365 Premium and a year of Xbox Game Pass Ultimate with a custom color Xbox wireless controller. Learn more at windows.com slash student offer. While supplies last, ends June 30th. Terms at aka.ms slash college PC.

7:20The House plans to vote today on whether to restrict President Trump's ability to continue the war against Iran without congressional approval. The resolution is largely symbolic. It won't by itself end the war, and it's unlikely to ever become law. Before today, House Democrats have tried and failed multiple times this year to pass resolutions that would limit the president's war powers. And in the Senate, Republicans have blocked similar resolutions. The war, now in its fourth month, has morphed from a heavy bombing campaign to a fragile ceasefire. Negotiators remain far apart, and in recent days, the war has heated up, with attacks hitting Kuwait particularly hard.

7:56Today, Iran launched a barrage of ballistic missiles and drones on Kuwait that shut its international airport, killed one person, and injured dozens more. It's some of the most intense fighting since the ceasefire started in April. Moving now to the Ukraine war. Today, Ukrainian drones hit an oil terminal in St. Petersburg, as well as a nearby naval base. The strikes happened as international guests began arriving for the first day of the St. Petersburg Economic Forum, where Russian President Vladimir Putin is expected to deliver a speech on Friday. Ukrainian officials said the strikes are aimed at weakening Russia and driving domestic opposition to the war.

8:31Meanwhile, the Kremlin said the attacks were justification for its continuing invasion of Ukraine and that Russia would respond. In an update on the deadly Ebola outbreak, the virus has spread to a corner of the Democratic Republic of Congo that's controlled by Islamic State militants. The virus has killed one person in the militant-controlled territory of Mombasa, while another is being treated at a clinic. It's a place that's too dangerous for health workers to go. And health experts are concerned that this will make controlling the epidemic even harder. And back in the U.S., federal regulators are probing former Congressman George Santos for illegal trading on prediction markets.

9:08Santos allegedly placed a bet on prediction market calci that he wasn't going to appear at the State of the Union address. Meanwhile, he wrote several posts on social media saying or suggesting that he was going. He didn't go to the State of the Union. Posting on social media, Santos called the accusation of illegal trading, quote, preposterous. Santos is no stranger to the law. In 2024, after being expelled from the House, he pleaded guilty to wire fraud and identity theft. He was sentenced to seven years in prison. Santos served a few months before President Trump commuted his sentence. And finally...

9:44Meghan Bobrowsky:Believe it, Knicks fans, for the first time in 27 years, the New York Knicks are going to the NBA Finals. That was the NBA broadcast of the Knicks sweeping the Cleveland Cavaliers. And tonight is the first game of the NBA Finals, the New York Knicks versus the San Antonio Spurs. And Knicks fans are particularly excited. It's the first time their team has made it to the Finals since 1999. Walking around New York City, I see Knicks love everywhere. A lot of orange and blue out there. WSJ sports reporter Jared Diamond says fans really want to see their team play in the Finals. There's this incredible pent-up demand for the Knicks to be good, and we're finally seeing it.

10:23Meghan Bobrowsky:There are a lot of Knicks fans that are now literal adults that have never seen the Knicks in this position, right? So the interest is enormous. But fans who want to cheer the Knicks on at Madison Square Garden are looking at some steep price tags. We checked resale sites today, and you can't buy a nosebleed seat for less than$5K. And tickets near the court were going for nearly$160 ,000. The sky-high prices are keeping a lot of diehards out, like 39-year-old Josh Lanzette. Took me three minutes to see those prices almost fall out of my chair and eliminate MSG as an option. So what's a Knicks fan to do?

11:02If you're someone with a bit of money, a bit of time, and a lot of passion, you can go see your team play in the finals in Spurs territory in San Antonio. One New Yorker I spoke with, 25-year-old Arman Imani, did the math for me.

11:15Meghan Bobrowsky:So for a two-night stay at a hotel, I've seen rates go for$300 a night. I got that via points, so that's cut out of the cost. Airline cost is still going for around$700. Got that with miles. And then the ticket itself, I paid$1 ,800. And all that's still cheaper than going to MSG. Significantly cheaper. As journal reporter Jared Diamond points out, that's still not cheap. This is still not accessible to sort of your typical Knicks fan, right? But it just puts it into perspective how insane these prices are at the Garden. There are enough very rich people in New York City that are not just Knicks fans, but they want to say they were there.

11:54Meghan Bobrowsky:It's like going to the Met Gala or going to the Super Bowl or one of these big events. If you're in that in crowd, you need to be there to be seen. Everyone else, see you at the bar, I guess. And that's what's news for this Wednesday afternoon. Today's show is produced by Danny Lewis and Anthony Bansi with supervising producer Tali Arbel. I'm Alex Osalo for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

12:30Meghan Bobrowsky:Hey, this is Tell Us Demos. And I'm Miriam Gottfried. We're reporters at The Wall Street Journal and the hosts of WSJ's Take on the Week. It's a weekly show that gives listeners a leg up in the world of markets and investing.