Latest / Bloomberg Intelligence / Lilly to Buy Three Vaccine Developers for Up to $3.8 Billion

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Lilly to Buy Three Vaccine Developers for Up to $3.8 Billion · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 2: Well, I was going to call it a merger Monday,
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  Speaker 2: but it's Tuesday, so that doesn't work. But that doesn't
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  Speaker 2: stop the pharmaceutical companies from doing more deals. As I'll
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  Speaker 2: set it before, I'll say it again in the next life,
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  Speaker 2: I'm coming back as a healthcare MNA banker because they
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  Speaker 2: get paid every single week.
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  Speaker 3: It seems like in this week's no different.
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  Speaker 2: Madison Muller Joints. Is here a healthcare reporter for a
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  Speaker 2: Bloomberg News Eli Lelei grees to buy three vaccine developers
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  Speaker 2: for as much as three point eight billion dollars. Madison,
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  Speaker 2: what's Elili looking to do here?
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  Speaker 4: Yeah, I mean, it's definitely an interesting time to be
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  Speaker 4: buying into the vaccine space, given sort of the political
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  Speaker 4: climate that we have in the US with Health Secretary
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  Speaker 4: Robert F. Kennedy Junior, who has pulled funding from various vaccines,
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  Speaker 4: who and we've sort of lost seen a loss of
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  Speaker 4: public support for vaccines, but that has not stopped Lily.
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  Speaker 4: I mean, Lily has been on a tear recently with
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  Speaker 4: m and A. The company has a lot of cash
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  Speaker 4: on hand thanks to the popularity of its blockbuster obesity
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  Speaker 4: and diabetes medications, and what it's looking to do now
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  Speaker 4: is to build toward that next era of growth. What
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  Speaker 4: happens after these medications that are fueling its growth right
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  Speaker 4: now lose patent protection as they always do in the
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  Speaker 4: pharmaceutical industry, and so vaccines are going to be at
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  Speaker 4: least it appears to be part of Lily's sort of
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  Speaker 4: next era. They hired former FDA official Peter Marx last
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  Speaker 4: year to lead their infectious disease unit, and then this
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  Speaker 4: is their first real foray into that space. So there
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  Speaker 4: are three different companies as you saw that they are
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  Speaker 4: buying as of today to target various different global health crises,
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  Speaker 4: from antimicrobial resistance to epstein bar virus and others.
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  Speaker 5: It will be pretty interesting to see what happens.
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  Speaker 6: He shingles as well, one of that mic up against.
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  Speaker 6: I guess the leader in that space is the is
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  Speaker 6: it Shingris, Yeah, the Stringrix vaccine. So do we know
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  Speaker 6: more about this deal? I mean, I know the three
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  Speaker 6: companies that they're buying are privately held, but do we
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  Speaker 6: know anything else about these deals are because usually with
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  Speaker 6: these kinds of things, there are milestone so as you,
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  Speaker 6: I guess, I don't know, set sales goals or what
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  Speaker 6: have you.
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  Speaker 4: Yeah, yeah, exactly, And that is a part of this.
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  Speaker 4: There are going to be milestone payments.
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  Speaker 2: Uh.
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  Speaker 4: These various companies, I mean based sort of all over
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  Speaker 4: the world, couple in the US. Outside of the US,
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  Speaker 4: I think one is based in Zurich, and so they
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  Speaker 4: you know, Lily has a track record of going earlier
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  Speaker 4: in the you know, drug development process.
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  Speaker 5: They like to go for these earlier.
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  Speaker 4: Stage, cheaper deals versus later on sort of bigger mergers.
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  Speaker 4: And that's this is the sort of the same pattern
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  Speaker 4: that we're seeing here. A couple of them are in
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  Speaker 4: clinical already, one of them is about to be ready
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  Speaker 4: for phase one trials, and so Lily will be able
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  Speaker 4: to really partner with them and take them through that process,
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  Speaker 4: which is something that's often hard and expensive for biotechs
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  Speaker 4: to do on their own.
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  Speaker 2: So for these big former companies that are out there
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  Speaker 2: in the marketplace with these weight loss drugs. They're not
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  Speaker 2: standing still, are they. They're making them better, more powerful,
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  Speaker 2: less side effects.
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  Speaker 3: What's Lily doing for them?
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  Speaker 4: Lily is basically doing everything. I mean, they have their
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  Speaker 4: strategy and Obesity is to throw everything that they have
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  Speaker 4: at this. They don't want to be left out of it.
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  Speaker 4: They don't want what happened to Nova Nordisk to happen
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  Speaker 4: to them. I mean, Novo has sort of been caught
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  Speaker 4: flat footed just by how quickly this market has moved,
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  Speaker 4: and there are a lot of competitors and a lot
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  Speaker 4: of people, like you said, trying to develop better weight
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  Speaker 4: loss drugs, whether that's you know, pill forms or less
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  Speaker 4: side effects or taken monthly. Nova's sort of struggling to
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  Speaker 4: figure out its next move and fill its pipeline. Lily has,
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  Speaker 4: you know, strategically made the decision years ago to throw
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  Speaker 4: everything that they had at over and so they are
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  Speaker 4: looking at different types of molecules, something called amulin, which
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  Speaker 4: is thought to maybe be a little bit gentler on
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  Speaker 4: the stomach, maybe not have the same GI effects that
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  Speaker 4: the current generation of weight loss drugs have. They're looking
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  Speaker 4: at less frequent dosing, They're looking they just had a
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  Speaker 4: new pill approved. They are looking at drugs that are
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  Speaker 4: even more effective than the ones currently on the market.
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  Speaker 4: So it's pretty much like everything under the sun. They
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  Speaker 4: want to they want to be playing in.
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  Speaker 2: The next area they need to focus on being the
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  Speaker 2: pharmaceutical industry.
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  Speaker 7: Baldness, baldness, huge opportunity to put the hair back on,
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  Speaker 7: you know, half the most big I mean is that
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  Speaker 7: something that's they're talking about is yes.
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  Speaker 2: The same areas is like obesity exactly.
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  Speaker 4: So Lily actually does have a drug drug for alopecia,
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  Speaker 4: which is a little bit different. But there is another company,
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  Speaker 4: and I'm blanking on the name, but I know the
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  Speaker 4: ticker is Maine, which is pretty creative that has been
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  Speaker 4: getting some hype re simply because they are developing supposedly
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  Speaker 4: better hair loss treatment. So that's the one that I
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  Speaker 4: know people have been watching.
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  Speaker 6: But you know, when you look at these stocks like Eli,
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  Speaker 6: Lilly has barely budged year to date, and you mentioned
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  Speaker 6: Novo norda sort of being held flat footed here to date,
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  Speaker 6: they're down almost twelve percent, which I mean, I guess
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  Speaker 6: I get that, but I would I would expect a
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  Speaker 6: more enthusiastic response to Eli Lad than for some reason,
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  Speaker 6: the stock's just not moving much.
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  Speaker 4: Yeah, I mean I think that's because at this point,
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  Speaker 4: it's they've just grown so much. I mean, their valuation
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  Speaker 4: is enormous. They hit a trillion dollar they were the
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  Speaker 4: first healthcare company to hit a trillion dollar valuation last year,
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  Speaker 4: and I think it's it's hard for investors to see
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  Speaker 4: much more right now, Like when you're.
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  Speaker 6: At the very they sort of top or they've peaked, right.
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  Speaker 5: Like, what what is there to get excited about?
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  Speaker 4: Which, you know, there is a lot that Lily is doing,
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  Speaker 4: but I think to get it up from the high,
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  Speaker 4: high high point that it's at now, I mean, it
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  Speaker 4: has to be something pretty spectacular. So I think that
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  Speaker 4: right now, investors are sort of just watching and waiting
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  Speaker 4: to see what happens, Like are they eventually, you know,
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  Speaker 4: is there a mistake or a hiccupcoming or are they
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  Speaker 4: going to be able to sustain this incredible growth? And
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  Speaker 4: so I think that that's sort of the moment we're
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  Speaker 4: in right now.
• 6:10
  Speaker 2: Stay with us more from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us Live
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  Speaker 1: weekdays at ten am Eastern on Apple Cocklay and Android
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  Speaker 1: you get your podcasts, or watch us live on YouTube, and.
• 6:32
  Speaker 2: We talk IPOs. We've been talking all about SpaceX over
• 6:35
  Speaker 2: the last and for good reason. It's gonna be some huge,
• 6:38
  Speaker 2: huge offering there and as well as maybe some AI
• 6:40
  Speaker 2: deals coming down to space.
• 6:41
  Speaker 3: But there's another one out there.
• 6:44
  Speaker 2: There's a quantum computing IPO. That's the other like secret
• 6:47
  Speaker 2: sauce out there edition to AI. You mentioned quantum computing
• 6:50
  Speaker 2: and that gets your attention. Here Anthony Edwards Joints is here,
• 6:53
  Speaker 2: equity capital markets reporter for Bloomberg News. Talk to us
• 6:56
  Speaker 2: about Honeywell this Honeywell back to deal Quantinium. What does
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  Speaker 2: this company do and what are they coming public for?
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  Speaker 8: Yes, well, Quantinum is another quantum computing company. I mean,
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  Speaker 8: there's been quite a few that have gone public over
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  Speaker 8: the last say three or four years, but most of
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  Speaker 8: those have gone public SPAC mergers, which is probably you know,
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  Speaker 8: sometimes that raises a question mark about their quality. And
• 7:20
  Speaker 8: obviously also the SPAC merger process sort of lends itself
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  Speaker 8: to companies that perhaps don't have an established level of profitability.
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  Speaker 8: But so the interesting thing here is that this is
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  Speaker 8: a fairly large IPO.
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  Speaker 9: This company will be looking at quantinium.
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  Speaker 8: We'll be looking to raise about a billion dollars for
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  Speaker 8: a sort of market value market cap of around sort
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  Speaker 8: of twelve thirteen. And yeah, I mean the company is
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  Speaker 8: not profitable, but it does. It is a bit more
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  Speaker 8: mature than some of most of the other quantum computing
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  Speaker 8: names out there. But you know, this is just going
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  Speaker 8: to be another way for people to play quantal computing,
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  Speaker 8: which has become one of these big themes. And you
• 7:56
  Speaker 8: know what is kinal computing? Well you sort of need
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  Speaker 8: a agree and quantum mechanics to explain it to you. Well,
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  Speaker 8: but basically these are very powerful computers that these companies
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  Speaker 8: are developing, and you know it's a little bit way off,
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  Speaker 8: but this can solve some really complex tasks that really
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  Speaker 8: classical computing can't. So you know that's about those good
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  Speaker 8: an explanations I can give you.
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  Speaker 10: So what are some of the complex tasks they can solve? Like,
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  Speaker 10: what are some of the whis that quantum computing can
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  Speaker 10: make money or help businesses in kind of in this
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  Speaker 10: moment we're in.
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  Speaker 8: Yeah, well, I think the classic use case which people
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  Speaker 8: have been talking about and certainly with this the marketing
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  Speaker 8: of this IPO is around drug discovery, where basically that
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  Speaker 8: has a process that takes you know, can take a
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  Speaker 8: very long time to take a drug from from the
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  Speaker 8: R and D to commercialization. And using these you know,
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  Speaker 8: powerful powerful computing that's one you know, one idea I
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  Speaker 8: guess is that you may be able to really speed
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  Speaker 8: up the whole R and D process because the way
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  Speaker 8: these computer work, these computers work that they can sort
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  Speaker 8: of process so much information sort of simultaneously in a
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  Speaker 8: way that classical computing card and you can really sort
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  Speaker 8: of go through these trials and and much much quicker
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  Speaker 8: and really get to you know, get through that process.
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  Speaker 2: That's just one one area.
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  Speaker 8: And obviously the full commercial adoption of quantum computing is
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  Speaker 8: some way off, and obviously there's a view that there'll
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  Speaker 8: be plenty of other, you know, ways in which quantum.
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  Speaker 9: Computing can be deployed in the future as well.
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  Speaker 1: Well.
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  Speaker 2: The Trumpet Administration is supporting quantum computing. They're announced on
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  Speaker 2: ME twenty first two billion dollars in funding for some
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  Speaker 2: of these companies.
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  Speaker 8: Is Quantinium part of that group, Yes, So Quantinium got
• 9:41
  Speaker 8: one hundred million out of that deal. So you know,
• 9:44
  Speaker 8: obviously in recent times the US government has put a
• 9:47
  Speaker 8: bit of money into some companies, and those companies like Intel,
• 9:51
  Speaker 8: and that's become obviously a very hot.
• 9:53
  Speaker 9: Stock after being very poor stuff a very long time.
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  Speaker 8: But yeah, so the whole sector, well, there's two billion
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  Speaker 8: dollars devoted to about nine different companies in IBM getting
• 10:03
  Speaker 8: a billion dollars was the line's share of it, but
• 10:05
  Speaker 8: there were some companies that actually missed out, so you know,
• 10:08
  Speaker 8: some people wondering why that was. But basically, the government's
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  Speaker 8: prepared to invest a lot of money, and governments around
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  Speaker 8: the world are actually by showing it preparedness to invest
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  Speaker 8: a lot of money in quant computing because they feel
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  Speaker 8: like it has a sort of an important industrial and
• 10:22
  Speaker 8: you know, national security relevance to them.
• 10:26
  Speaker 2: SpaceX, let's take it rep back.
• 10:28
  Speaker 3: There have we seen a schedule at road source schedule.
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  Speaker 8: Yet, I know, But basically the expectation is that, I mean,
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  Speaker 8: this IPA Quantinuum is going to price on Wednesday, Dune third, Okay,
• 10:38
  Speaker 8: but the current expectation is that SpaceX will be launching
• 10:41
  Speaker 8: its IPO, begin marketing its IPO on the day after
• 10:45
  Speaker 8: that potentially, and so really what we're seeing is Quntinium.
• 10:48
  Speaker 8: And then there's actually about a handful of other companies
• 10:52
  Speaker 8: that are looking to go public before SpaceX, which somewhat
• 10:55
  Speaker 8: lies in the face of the idea that other companies
• 10:57
  Speaker 8: were going to completely steer a wide berth of space
• 11:00
  Speaker 8: But you know, we don't expect to see a lot
• 11:02
  Speaker 8: of other IPOs on the road at the same time
• 11:04
  Speaker 8: as SpaceX. But we are going to see a decent
• 11:06
  Speaker 8: amount of companies here, about four or five billion dollars
• 11:08
  Speaker 8: worth of deals come right before SpaceX front or just
• 11:12
  Speaker 8: I'm not sure front run direct term, but just to
• 11:14
  Speaker 8: kind of get out there before.
• 11:15
  Speaker 2: SpaceX sucks all that capital out of the marketplace.
• 11:18
  Speaker 3: Presumably.
• 11:19
  Speaker 8: Well, you know, I think the early indications are that
• 11:22
  Speaker 8: there is going to be a lot of demand for SpaceX.
• 11:24
  Speaker 8: I think we're going to find out more about that
• 11:25
  Speaker 8: over the next week or so. I mean, it's been
• 11:26
  Speaker 8: interesting because when that filing came out last week, I mean,
• 11:29
  Speaker 8: I think a lot of people scratch their heads around
• 11:31
  Speaker 8: the financials and the like, but I think, you know,
• 11:33
  Speaker 8: there's a palpable sort of level of interest and hype
• 11:35
  Speaker 8: around the whole thing, which probably means that they are
• 11:38
  Speaker 8: going to be able to get the money fairly well.
• 11:40
  Speaker 9: And you know, we can.
• 11:42
  Speaker 8: See that the banks are showing I seem relatively confident
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  Speaker 8: they can raise the pretty reasonable sums of money in
• 11:48
  Speaker 8: some of these other deals as well.
• 11:50
  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: weekdays at ten am Eastern on Apple, Coarclay, and Android
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• 12:07
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 12:11
  Speaker 2: This next segment, this should really be Matt Miller.
• 12:13
  Speaker 3: I don't know where he is, but I'll try. We'll
• 12:15
  Speaker 3: try to do it justice.
• 12:16
  Speaker 2: Here, Craig Drudel joins his Global Autos editor for Bloomberg News.
• 12:20
  Speaker 3: I think you have another title.
• 12:21
  Speaker 2: Now right, Yeah, yeah, old notes what you need to
• 12:25
  Speaker 2: like grandpoo Bob.
• 12:26
  Speaker 3: We moved you back from London.
• 12:27
  Speaker 11: Managing editor for Business, very titled.
• 12:30
  Speaker 3: Yes, that's big.
• 12:31
  Speaker 2: We moved them back from London. So Craig here in
• 12:33
  Speaker 2: New York for better or worse. Craig talked to us
• 12:35
  Speaker 2: about Ferrari. That's all people are talking about here. They
• 12:37
  Speaker 2: launched their first fully electric car. Again, I'm not like
• 12:42
  Speaker 2: a Ferrari, dude, that's a Matt Miller's territory. But tell
• 12:44
  Speaker 2: us what you're saying.
• 12:46
  Speaker 11: I knew, no matter what, it was going to be
• 12:49
  Speaker 11: something that I would be talking with a lot of
• 12:51
  Speaker 11: people this morning, knowing that this unveiling was going to
• 12:54
  Speaker 11: be happening last night. But it absolutely has been you know,
• 12:59
  Speaker 11: universal and universally sort of what is this? You know,
• 13:03
  Speaker 11: how is this uh a Ferrari. It is very Unferrari
• 13:07
  Speaker 11: like in its exterior design. It looks like a just
• 13:12
  Speaker 11: more of a sort of typical car. I do think that,
• 13:15
  Speaker 11: you know, they do get some credit for, you know,
• 13:17
  Speaker 11: some of the details that they shared previously. The interior
• 13:20
  Speaker 11: I think is widely uh you know, widely you know,
• 13:23
  Speaker 11: well regarded and has some cool touches to it. But
• 13:26
  Speaker 11: from the outside it looks, you know, very Unferrari like
• 13:30
  Speaker 11: h and is very polarizing.
• 13:31
  Speaker 10: Okay, Yeah, the Ferrari is known for its like really sleek,
• 13:35
  Speaker 10: beautiful Italian lines, and this looks a little bit like
• 13:38
  Speaker 10: a Prius.
• 13:39
  Speaker 1: Yeah.
• 13:40
  Speaker 11: And and it's interesting that Johnny I've you know, was
• 13:43
  Speaker 11: brought in for the design of this, so you know,
• 13:46
  Speaker 11: maybe that was intentional to to sort of really shake
• 13:50
  Speaker 11: things up and and also perhaps to create some distance,
• 13:55
  Speaker 11: you know, given that no matter what, this was going
• 13:57
  Speaker 11: to have to be quite a departure from you know
• 13:59
  Speaker 11: what we've come to known from Ferrari for so many years.
• 14:02
  Speaker 2: How committed to evs are the Ferraris of the world,
• 14:06
  Speaker 2: the Lamborghinis of the world. I mean, when you're buying
• 14:09
  Speaker 2: a car, you know, you're like a Matt Miller. You
• 14:12
  Speaker 2: want to be seeing, you want to be heard, you
• 14:14
  Speaker 2: want to the roar of this thing and the distinctive
• 14:16
  Speaker 2: roars the sounds that these supercars make. How committed are
• 14:19
  Speaker 2: these manufacturers.
• 14:21
  Speaker 11: We've seen a lot of the higher end manufacturers actually
• 14:25
  Speaker 11: take steps back from from making this transition, and it
• 14:28
  Speaker 11: was always going to be complicated. I do think that
• 14:30
  Speaker 11: there are going to be some markets in the world
• 14:32
  Speaker 11: where they have to have a vehicle like this for
• 14:35
  Speaker 11: compliance reasons that you know, even for really low volume
• 14:38
  Speaker 11: manufacturers like Ferrari, which you know they will sell this
• 14:42
  Speaker 11: vehicle in the hundreds, as opposed to you know what
• 14:44
  Speaker 11: we're used to seeing from you know, the sort of
• 14:47
  Speaker 11: mass manufacturers, and so you know, this is not necessarily
• 14:51
  Speaker 11: a case where you know, ferraris going to live or
• 14:54
  Speaker 11: die based on the success of this vehicle. But there
• 14:56
  Speaker 11: are also going to be some countries where there is
• 15:00
  Speaker 11: not a sort of slack cut for even a high
• 15:03
  Speaker 11: you know, high value but low volume manufacturers like Ferrari,
• 15:07
  Speaker 11: and so they need to make this transition, even if
• 15:10
  Speaker 11: it's a very gradual in nature.
• 15:12
  Speaker 10: So in addition to the awesome rumbling engine, also the
• 15:16
  Speaker 10: cars are supposed to go really fast. They are built
• 15:18
  Speaker 10: for speed. What about this one?
• 15:21
  Speaker 11: Yeah, I think this is interesting. It's going to be
• 15:24
  Speaker 11: sort of commoditized that we see, you know, really quick
• 15:27
  Speaker 11: acceleration for electric vehicles. We've seen that for some time, right,
• 15:30
  Speaker 11: and I think that's something you have to give Elon
• 15:32
  Speaker 11: Musk credit for that. You don't have a situation where
• 15:36
  Speaker 11: electric cars need to be sort of compliance vehicles that
• 15:40
  Speaker 11: look like toasters and like science projects. You can make
• 15:44
  Speaker 11: an electric car, you know, not just a sexy but
• 15:48
  Speaker 11: you know, the instant torque that you get out of
• 15:51
  Speaker 11: out of an electric vehicle with you know, battery that
• 15:53
  Speaker 11: just that that power goes straight to the wheels. You're
• 15:56
  Speaker 11: going to get that, and you would expect that of
• 15:59
  Speaker 11: Ferrari's where they have they're going to have a motor
• 16:01
  Speaker 11: on each wheel for this vehicle. It is going to
• 16:04
  Speaker 11: be incredibly quick, about two and a half seconds from
• 16:08
  Speaker 11: zero to sixty. So this one will absolutely throw your
• 16:11
  Speaker 11: head back, even if you know, maybe it's it's not
• 16:14
  Speaker 11: the biggest looker, uh, you know, to to sort of
• 16:16
  Speaker 11: show off to your to your friends.
• 16:18
  Speaker 2: All right, while we got you here, you mentioned it
• 16:20
  Speaker 2: Tesla here.
• 16:22
  Speaker 3: I mean, what's going to happen with this company?
• 16:24
  Speaker 2: Because everybody's attention, including I'm assuming Elon Musk's attention is
• 16:29
  Speaker 2: on SpaceX.
• 16:30
  Speaker 3: What do you guys who followed Tesla.
• 16:32
  Speaker 2: To this day one, how do you think this is going
• 16:33
  Speaker 2: to play out?
• 16:34
  Speaker 11: I think it's it's fascinating that also that we probably
• 16:38
  Speaker 11: take for granted how long it's been the case that
• 16:40
  Speaker 11: this is the company that that Elon Musk is paid
• 16:44
  Speaker 11: most attention to. Uh, and that even for you know,
• 16:47
  Speaker 11: Tesla being as as successful as it has been and
• 16:51
  Speaker 11: built itself into you know, the far and away the
• 16:53
  Speaker 11: most valuable car manufacturer. SpaceX has long been his baby
• 16:57
  Speaker 11: and sort of you know what he's uh, sort of
• 17:00
  Speaker 11: focused on of, you know, taking us to other planets.
• 17:05
  Speaker 11: I do think that it's fascinating to me that some
• 17:08
  Speaker 11: of the people that are closest to Musk now are
• 17:11
  Speaker 11: sort of talking very openly about the notion that the
• 17:14
  Speaker 11: SpaceX IPO might be sort of step one in further
• 17:18
  Speaker 11: consolidation of his empire, and that perhaps a Tesla SpaceX
• 17:24
  Speaker 11: combination down the line.
• 17:28
  Speaker 2: Stay with us. More from Bloomberg Intelligence coming up here
• 17:30
  Speaker 2: for this.
• 17:34
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 17:38
  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
• 17:41
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• 17:44
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• 17:48
  Speaker 2: The World Cup is coming, starts June eleventh. First game
• 17:52
  Speaker 2: for the US of a June twelfth, US against Paraguay.
• 17:55
  Speaker 3: You got that going for you.
• 17:57
  Speaker 2: It's big business. It's big business globally. We're not really
• 18:01
  Speaker 2: into it so much yet here in the US, but
• 18:02
  Speaker 2: I'm sure we'll get there over the next few weeks.
• 18:04
  Speaker 2: Jen Bartasha, she's been crunching the numbers. She covers all
• 18:07
  Speaker 2: the retail stuff for Bloomberg Intelligence. Jen, I'm seeing some
• 18:11
  Speaker 2: huge numbers of what the world Cup means economic impact
• 18:14
  Speaker 2: across the globe.
• 18:15
  Speaker 3: How do you guys look at it?
• 18:17
  Speaker 12: Yeah, hi, Paul. So you know, the estimates this year
• 18:21
  Speaker 12: are that the World Cup around the world could be
• 18:24
  Speaker 12: a result in eighty billion dollars worth of spending. So
• 18:26
  Speaker 12: it's a huge sporting event. It's the biggest event for
• 18:30
  Speaker 12: a lot of countries around the world. But as you
• 18:32
  Speaker 12: alluded to in your warm up or entry, the United States,
• 18:37
  Speaker 12: we're not such a big soccer country, so it's going
• 18:39
  Speaker 12: to be very interesting to see how having the tournament
• 18:42
  Speaker 12: here plays out with regards to that anticipated spend.
• 18:46
  Speaker 6: I'm wondering if the NBA finals and I'm going to
• 18:48
  Speaker 6: be very New York centric right now for a moment,
• 18:50
  Speaker 6: but we've got the New York Knicks in the finals
• 18:52
  Speaker 6: for the first time since nineteen ninety nine over at MSG.
• 18:57
  Speaker 6: Is that going to take any of the thunder away
• 19:00
  Speaker 6: from the World Cup or these two different sets of
• 19:02
  Speaker 6: fans or maybe is that part of the problem.
• 19:05
  Speaker 12: Well, it's a good question, Alexis, and I think that
• 19:09
  Speaker 12: you're talking about kind of two sets of fans. Everybody's
• 19:12
  Speaker 12: very excited about the Nicks, and you know, as that
• 19:15
  Speaker 12: final comes through and we see what happens. I think
• 19:18
  Speaker 12: there's grounds and reason for the city to celebrate, But
• 19:22
  Speaker 12: the World Cup matches are actually happening outside of Manhattan.
• 19:25
  Speaker 12: They're happening in New Jersey and right now. One of
• 19:28
  Speaker 12: the challenges I think for the World Cup is that
• 19:30
  Speaker 12: none of the matches are sold out. Ticket prices are
• 19:34
  Speaker 12: way out of the reach of your average your average fan,
• 19:38
  Speaker 12: and so as we get closer to the tournament, part
• 19:41
  Speaker 12: of what we'll be seeing is, you know, do those
• 19:43
  Speaker 12: prices come down to help improve engagement and get people
• 19:46
  Speaker 12: in the stadia and get them excited about the tournament?
• 19:50
  Speaker 2: Jen Right now, what are the brands that are really
• 19:53
  Speaker 2: making big commitments to the World Cup these days?
• 19:56
  Speaker 12: Yeah, it's a it's it's obviously there are a lot
• 19:59
  Speaker 12: of partnerships. It happened with regards to brands on the
• 20:02
  Speaker 12: apparel side, Adidas is leading. You know, they have made
• 20:05
  Speaker 12: commentary from their management team that they expect the World
• 20:08
  Speaker 12: Cup to generate a billion euros and revenue for them.
• 20:11
  Speaker 12: Are analysts who's Punam Goyel are a lead analyst for Adidas.
• 20:15
  Speaker 12: She thinks it's closer to one point two billion euros.
• 20:18
  Speaker 12: You've also got brands that are doing other partnerships like
• 20:21
  Speaker 12: Old Navy and the Gap where they're at a much
• 20:23
  Speaker 12: lower price point, but they're having the ability for people
• 20:26
  Speaker 12: to just buy a T shirt for the team that
• 20:28
  Speaker 12: they're supporting. So you're seeing it across all different levels
• 20:32
  Speaker 12: within the retailer space, and I think that those are
• 20:36
  Speaker 12: the things that get people excited if they pick, if
• 20:40
  Speaker 12: they pick a team and they're able to follow it
• 20:42
  Speaker 12: and they're able to participate in some way. But those
• 20:45
  Speaker 12: are you know, when you look at the athletic brands,
• 20:48
  Speaker 12: Adidas and Nike are the ones who have the kits,
• 20:51
  Speaker 12: the uniforms for the most teams that are in the Cup.
• 20:55
  Speaker 12: So if people go out and they buy the actual jerseys,
• 20:58
  Speaker 12: that's a benefit for Adidas.
• 20:59
  Speaker 6: In ni Jen, I want to go back to ticket prices,
• 21:02
  Speaker 6: which has been a sore spot for fans that they've
• 21:05
  Speaker 6: just been you know through the roof in many places
• 21:08
  Speaker 6: because FIFA is using dynamic pricing. If there are a
• 21:12
  Speaker 6: lot of seats left just before these matches happen, you know,
• 21:16
  Speaker 6: are we going to see material drop in prices?
• 21:18
  Speaker 12: Do you think it is possible that we'll see a
• 21:21
  Speaker 12: dropped in prices as the matches become nearer because of
• 21:23
  Speaker 12: that dynamic pricing. But it's not just the match. If
• 21:27
  Speaker 12: you've seen any of the other media out there, it's
• 21:30
  Speaker 12: about getting to the match as well. So you know,
• 21:33
  Speaker 12: we've seen you know, New Jersey Transit for example, talking
• 21:36
  Speaker 12: about getting to Giants Stadium where there are going to
• 21:38
  Speaker 12: be matches. You know, the round trip train ticket at
• 21:41
  Speaker 12: one point was one hundred and fifty dollars. Now it's
• 21:43
  Speaker 12: closer to one hundred dollars, but that's still a big
• 21:46
  Speaker 12: outlay just to even get to the stadium where that's happening.
• 21:50
  Speaker 12: Not every city is doing the same thing, but there
• 21:54
  Speaker 12: are lots of ways that fans are getting gouged beyond
• 21:57
  Speaker 12: just the actual ticket price to be able to go
• 21:59
  Speaker 12: to the stadium and enjoy the show.
• 22:01
  Speaker 2: What did the retailers say, Does this drive sales like
• 22:04
  Speaker 2: the people come and buy jerseys and things like that.
• 22:08
  Speaker 12: It depends. I think it's the answer, Paul. In the
• 22:11
  Speaker 12: United States, I think that there's a little bit less
• 22:15
  Speaker 12: of that unless the US team happens to go far.
• 22:19
  Speaker 12: The further the US team goes in the tournament, I
• 22:21
  Speaker 12: think the better that is for US based retailers. Because
• 22:25
  Speaker 12: people will jump on that fanbag fan fan bandwagon and
• 22:30
  Speaker 12: purchase things to show support for the US team. Globally, however,
• 22:34
  Speaker 12: it's good for those brands that are, as I said,
• 22:37
  Speaker 12: Adidas and Nike, those brands that have the official jerseys.
• 22:42
  Speaker 12: There's a lot more of that kind of purchases that
• 22:44
  Speaker 12: happen overseas.
• 22:46
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