Power Lunch - Jobs Report Reaction, Grok Bot Opportunity, Congress & College Sports 10/2/26

Episode Date: October 2, 2026

Stocks are rising following a surprisingly weak September jobs report that raised hopes the Federal Reserve will hold rates steady in October.Kelly Evans and Brian Sullivan are joined on set by Neuberger’s Jeff Blazek and Wells Fargo’s Tom Porcelli to get their initial thoughts on the state of the economy following September’s weaker-than-expected jobs report.Evercore ISI Analyst, Kutgun Maral, joins the show to explain why he believes xAI’s Grok Bot is an underappreciated part of SpaceX that may prove to have massive upside for investors as the race for AI agent market share heats up.Later on, Bruin Capital Founder and CEO, George Pyne, comes on set to discuss the world of professional and collegiate sports as Congress looks to pass a new bill regulating NIL funds. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

A power-packed end of the week is stocks move higher. Welcome to Power Lunch with Kelly. I am Brian. Tech trade back on top. NASDAQ, NASDAQ, Baxter, Baxter, broader tech, pushing to record highs in part because of a weaker than expected jobs number, easing pressure on rates and oil. Are you thinking about investing for your kids? White House's Bigwig and IRS CEO Frank Bizignano is here. Talk about Trump accounts, taxes, debt, and more.

You know, they have a new app. The IRS app. What's it called? IRS app. Uh-oh. Your favorite agency. Well, I don't know if they make it that easy to use. No, no, that I hate it more. Our call of the day, SpaceX makes headlines for its rockets and satellites.

But one Wall Street analyst says its biggest underappreciated asset could be a big revenue generator. And that analyst will join us. Also, the business of sports, George Pine, the founder and CEO of Bruin Capital, on where the next wave of value creation is coming from, and how talented leaders can turn into potential long-lasting returns for investors, owners. and partners. Let's begin, though, with a Fed rate hike that may be off the table for now. Traders are rapidly dialing back expectations for a move this month. I'm not even making a train ticket. Following a weaker than expected jobs report, take a look at the CME's Fed Watch tool,

an 80% chance nearly that the Fed holds steady and just a 20% chance of a hike this month. But in October pause, of course, doesn't necessarily mean they're finished for the year. Kalshi puts the odds of at least one more hike at 78%. Joining us now as well as Fargo, chief economist Tom Porcelli and Newberger co-CIO of multi-asset management, Jeff Blazick. It's great to have you guys both here. Tom jump in. Yes. What do you think this means now after this morning's jobs report? Yeah, look, Brian and I were talking about this a little while ago.

I think, to me, the biggest reveal within this payroll report was not so much what it says about the labor backdrop or what, you know, it says about consumption. I think actually it's what it says about inflation. Because, you know, look, the Fed has been pressing this idea that, they want to stop this potential supply shock inflation from becoming a demand shock scenario. It's really hard to achieve that if you don't have wage growth. Yeah, that's the only way it has. And you'd have to have huge wage growth.

Yes, exactly. And look, we've been saying this for a while. And you and I have talked about this. I don't like this hiking cycle. I get it. I think Warshwood is sort of painted into a corner a little bit on this. But I think that the market is right to basically start to scale back the odds of an October hike.

But the market also was the one taking the tenure and pressing it well. So why? Why were they doing that? Is it because of the Fed's rate hike path? Yeah. So I think that there's actually a couple of things to consider here. So there's almost like two legs to this rise that we've seen in yields. The first leg is, hey, look, we're now in a better growth backdrop. Growth prospects look pretty good. As a result, the Fed's going to have to adjust policy over some period of time. And that's what sort of really got us going. The last, like, you know, call it a couple of weeks, that's more technical in nature, right? And I'd like to stick with the fundamental part of it. But I think the bulk of the increase in yield that we have seen over the last several months, I think that that is entirely the market just normalizing. We're getting back to a sort of a normal state.

And that makes a lot of sense when you consider growth in the United States. What have we been at at least 2% growth for 14 straight quarters? Yeah, yields are supposed to be higher. It feels like, Tom, today is kind of a, or Jeff, it feels like today's kind of a normal day in a sense that invidia making another new high amd making another new high like all is right with the world i understand the jobs number was a bit weaker but i'm being a little bit tongue and cheek here from a market's perspective the buyers came back they don't care about the 5.2 5.3 percent yields well i like normal uh it sounds like you like normal a lot by the way and yeah i wish i knew

what that meant well real rates have risen a lot over five years but it's being driven by health growth. The post-GFC period was the abnormal experience, and this is better. I agree with Tom, too, that there's too much hawkishness being priced in. We think that maybe one more hike. We would also agree that's probably not necessary. But look, there's enough disinflation evidence in that. And one thing I would say, though, at the margin is we are getting a little more cautious on equities. So we actually are, we have been overweight for a couple of years through Liberation Day, through Iran, a lot of all. But now that we're getting into the mid-cycle, maybe the late cycle. It's probably a time to rebalance back a bit and take some chips up.

What is that? What are we taking up? What are we selling? Well, we're selling small cap, which we had been overweight for three years. Everybody hates small caps. Well, yeah. Well, look, it did really well. They can't defend themselves. They're small. Yeah, they're small. They're little guys. They develop, right? But that's the problem is they're levered. They are, they have a lot of input cost exposure. And the rising yields is going to limit the small cap our performance. And so we are now going to target on that. We're also cutting a because it's defined by three stocks that have done really well, but it's increasingly tethered to the AI infrastructure trade,

and that's just too high beta for us. Yeah. Well, small caps have been pretty good until you're off the table. So are you going 100% back into Nvidia then? Like, is that what we're talking about? Well, we're just roll it all in the AI, large cap AI tech trade and let a roll. Go underweight Nvidia at your own peril. So we would be, we do like the U.S. market.

And we would like the best positioned tech companies in terms of the exposures in that. But I think broadening out a bit, you know, there's some second and third derivative beneficiaries from this expansion. And the U.S. to us is the best grower in the world. And we want to be tied to that. Well, speaking of broadening it out, let's bring in another voice that you guys may know. His name is Rick Santelli. It is the Bonn report. And yes, we do have economic data.

We got the jobs number today. But Rick, today is officially your last day. I don't know if you heard this today or not. As a full-timer here at CNBC, although we know we will see you periodically. I can speak for myself only. It has been an absolute pleasure, my friend, for your insight, your candor, your wit, your wisdom, and your hot takes on a lot of things. So I'm not going to pretend to have a smart question to ask you because I also might get a little choked up. Just take it away.

Well, I'll tell you what, our panel is right, but I'm going to go in a slightly different direction. Consider the fact that when we started the year, if you look at the unemployment, rate, U3, it started out at 4.3 in January, went up to 4.4 in February. So, yes, I understand we move from 4.1 to 4.2, not necessarily bad news. And much of the 4.2, the increase of 1 tenth percent was an influx of new workers as the participation rate grew. And let's keep in mind, the participation rate's really important because of the demographics and, of course, some of the normalization with respect to immigration. But maybe the most important story today, in my opinion, is what you're discussing on Fed Fund futures.

They started out the week at a probability that's, what, three times greater than the kind of 20% we are now? Why is that important? It's what I call the new indirect form of guidance. The Fed got a message out, and it wasn't the true form of guidance we've all been used to for the last decade and a half. But nonetheless, having a hike in front of an election may not be a good idea. And I think the Fed, whether that was their primary reason or not, had a good community.

communication route via Williams, New York Fed, vice chair, Philip Jefferson, and others. And I think that's a key point to remember today. Do we want to talk Jefferson? Or do we want to talk Santelli? Well, I would like to just say it's an honor to be part of the sendoff. I've been watching Rick for 20 or 30 years. And I mean, amazing. What a career, including an over the name. You can talk to him. He's listening. He's hearing you, Jim. You have done great work over the years. And you called out the severity of the G. in real time and it was it was something that had a major impact of my career so what an honor yeah i i

would i would echo that rick really i i think what what an amazing run uh congratulations it's it's it's been a treat for all of us to listen to you and learn from you it's been wonderful who wants to audition to replace him no you can't couldn't do it i don't think those shoes can be filled oh because rick you know rick and it's not like he can hear me or anything uh you know Rick says what he believes and what he knows to be true based on the data he's looking at. And a lot of people just want to hear what they want to hear. They don't want to hear what's actually happening. And the world has become so polarized that people are like, well, that's not my narrative.

And so I don't want to hear it. Rick gives you what the market, the bond market, is saying. And Rick was calling for 5% yields before or talking about him 100 basis points ago. That's right. What did you see, Rick? Well, to me, the most important aspect of what's going on in the Treasury complex is what I was complaining about with Gallagher more than a dozen years ago when we were smashing watermelons and calling them deficits. That debt and deficits do matter, and the markets are actually starting to pay attention. I think the story is much bigger than that, but I think that's part of the tail wagging the dog.

And I would like to say that I think there is one more good rally to push yields down when the Middle East. conflict ends, but unfortunately, I think that will be a selling opportunity when we get that chance, maybe right around four and three quarters. Yeah, and what I would, sorry, what I would add, again, I think this is a super important point. I think what everyone has to keep in mind is that yields can rise for good reasons or they can rise for bad reasons. A bad reason would be, you know, inflation is getting out of control and et cetera. A really good reason would be growth has actually been pretty solid. The unemployment rate has basically moved sideways at full employment. And growth prospects, oh, courtesy of all this tech investing, is actually looking pretty good. And that's a

really good reason to actually have yields right. Tom, but if growth is so good, and by the way, I do agree with you that if you travel around the country as I do, you see things that are like, okay, growth is pretty good. Why does the data stink? Why is consumer confidence at like a 30-year, 40-year low? Why is the jobs number weaker than expected? You know the answer to that, right? I do, but it's like one of these questions where a lawyer will say, don't ask a question. You don't already know the So I think we all appreciate that, like, consumer confidence is the last thing that we're supposed to ever talk about as it relates to, hey, what's the state of actual consumption. What the consumer says and what they do can be completely different things. The reality is that consumption is moving along at a reasonable pace. We can have a reasonable argument, by the way, about the degree to which the wealth effect is impacting that it is. And by the way, there's no question that it is. But again, beneath the surface, the labor backdrop is only printing on average, what, 50,000 jobs? But here's the thing. What's the break even on payrolls? It's about 50 or 60,000 jobs. So you're keeping pace with that at this point. That's an interesting point.

Absolutely. And Atlanta GDP now is what, hovering at 3.6% in terms of, you know, what we're looking at for Q3. So there is plenty of optimism associated with the rate increase. I completely agree. And that, Jeff, I imagine, is falling, as we've talked about in this show, is falling toward valuation. It's falling to earnings. It's falling to multiples. And that you can take a look at this market, which has soared the last couple of years,

and say the valuation of this stock market is actually lower. It is a lot of lower. It was three years ago. For good reasons. And part of that is higher rates means lower PEs. Some of it's the cyclicality. So you have these tech companies that used to be very digital. Now they're very industrial.

And so they command lower multiples. But the third thing is there is a pivot. And Rick mentioned this already about issuance with deficits on the public side. The private side is issuing tons of debt. They're issuing more equity. They're buying back less stock. This is now becoming a more supplied market. in terms of equity and debt.

And that means investors, if you're in a buyer's market, you want higher yields and you want lower valuations because there's a lot more capital out there competing for investor attention. That's right. So what's Tom, the next big thing that you are, that you're watching? Jobs numbers out of the way. Yeah.

October 28th, Kelly just told us she's not booking a train ticket. Nope. So we're not going to D.C. Nope. We're not booking it last minute. Okay. So we're not going to D.C. on the 28th, because that's Kelly's indicator, which means there's not going to be a rate change.

So what's the next thing you're watching, Tom? So I will tell you that it pains me to say this a little bit because I don't think that we're supposed to just be so, like, attached to any single economic report. But I think the CPI report in two weeks or less than two weeks now, it's going to matter. And if all of a sudden, like, I can create a scenario where all of a sudden, you know, you get a blowout, and then all of a sudden the 21% chance of a Fed hike actually rises to, you know, 57%, right, or, you know, just inventing numbers.

I think that that's an important idea. Because I think, again, I think this is what Warsh has sort of brought on the market at this point. I think we're now focused on every single data point. And that's an irony on some level because I don't think he actually thinks about the world in those terms. But I think given a lot of his narratives of late, I think it's pushed us, it's pushed the market in that direction. This is exactly, it will end on this, I promise. But what Robin Brooks was writing about in Brookings the other day, that because he's left it open-ended, where this journey is going, that the market's forcing him at every meeting. Look, that's why are the rates swinging from 80% this way to 80% this way?

Because there's nothing, there's no center. The center cannot hold. Yeah, right. I don't know if that's the right analogy. Anyway, there's not an anchor. What does that mean then? What should Warsh do or what should the market do? Does that mean we ignore bond yields because they're just searching around trying to-

Data dependency, like the framework has to be better articulated? No, no question about that. I think, Jeff, you're spot on in that regard. And look, I think maybe the process has actually started of unwinding that, right? Like when you had Jefferson come out, who's not something who would normally come out and actually be so forceful around, hey, by the way, maybe we're going to actually take a step back. Maybe they're trying to reset.

And I actually, I sincerely hope that that's actually what's happening. All right, so, Rick, we're going to give you, my friend, the final word because that CPI number that Tom just talked about is out 8.30 in the morning on October 14th. So day to day, full-time, Rick Santelli's going to relax a bit. But are we going to see you on some of these key days where the data is hugely important? You know, you won't be able to see me until April, but I might be making a few text and phone calls to you, Sully, in particular, and give you kind of where I'm thinking. But I couldn't agree more with the guests. Every number now is important.

And every percentage and the probabilities the CME is important. Why? Because Warsh and the committee are paying close attention to one of their best indicators. Well, I love that. And I look forward to, I'm going to bang you back and be like, Rick, what am I asking this guest? because that's Rick Santelli. Real pleasure, my man. We will see you.

Thanks, Sally. Jeff and Tom, kind of a little bit of an emotional day. Absolutely. Absolutely. Yes. Very true. A legend. Thank you.

Very much, thank you. Thanks, everyone. All right. Coming up, Trump accounts, the big investment push for kids, now with more than 60 million accounts getting automatically enrolled, the CEO of the IRS and the former CEO of Pfizer Frank Bizigano is here. Plus, the money in sports, both college and pro, just keeps getting bigger. Sports investor George Pine will join us on the business of sports and money.

But first is the street. Are you missing something big about SpaceX? Your next guest thinks so, and it may not be what you think it is. Welcome back. We have not zeroed in on SpaceX in a while, but the shares are up 7% this afternoon to 158. That's well above the IPO price now after Evercore reiterated their outperform rating, saying the potential of SpaceX Grockbot remains underappreciated within the broader AI story. Joining us now is the author behind the note, Cut Gun, Moral.

He's Evercore's Media, Cable, and Telecom analyst. CutGun, it's great to have you here. And yeah, you're right. We think of SpaceX. We talk rockets. We talk about Starlink. How much should we be talking about Grockbot? We think a decent amount.

I mean, when you think about the broader industry, always on AI agents have become one of the hottest debates in AI. And from our perspective, we think investors are overlooking the product that got there first, which is Grockbot. It launched almost a month before Metas Muse and nearly seven weeks before Open AIs Dots. But like you said, when people talk about Space X, you know, we think about the rocket business. We think about Starlink and maybe we think about the growing content, the compute element of the story. But this Grockbot and Grecbought and cursor even barely come up.

And our takeaway is that Grockbot is both a real revenue opportunity on its own and especially another layer in SpaceX's full-stack AI platform. Okay, but tell me, I'm pretending to mess around with Muse, but I just don't have the capacity yet. I just got dazzled so I could figure out what that's all about with photos. I did. Using DAZE, it's kind of saying you can text it. Now you're telling me I got to go mess around with Grockbot. I've already got Gemini. How much capacity, I understand for high use programmers and things like that, but for the everyday person, how many of these different things am I going to use all of them, none of them, that you can easily switch back and forth. So I don't see how there's a real moat here. Yeah, I think the reality is

there's a lot of competition, but it's still really early days. To me, when I think about Muse and Dots and Grockbot and every other player coming into the space, as opposed to being worried about the competition, I think it's an indicator that the category is, the category is real. But to your point, it also means that the always-on AI agent is becoming a standard future rather than something that sets you apart in AI. when you think about who the winners could be, I think the race really shifts to distribution, fitting into existing workflows for enterprises, reliability and execution. You talked about the consumer experience a little bit. Mews has had a fantastic start, and it's been way faster

than GrogBot. It's free. Meta reaches billions of people. But when you think about Grockbot's real advantage here, it's less, I think, from our perspective, about the consumer and the personal use case. And it's really about leveraging cursors, developer-based, super GROCs. consumer base as well as the enterprise offering that they're really strong. And I think that'll be the bigger opportunity is with enterprise. So go into that a little bit more, cut gun, because to your point, and I was going to ask you about, you know, the usage difference. Meta is two billion people with Instagram and WhatsApp and Facebook. Like one in four and a half people in the world is on one or more of their platforms. X, and I'm a heavy user of X, formerly known Twitter, not nearly

that big. So how, how, we know the size of the audience difference, but how much might that enterprise, the corporate side, make up for the fact that it's smaller on the individual usage side? From our perspective, it's important to keep in mind that this is incredibly early days. I think when you look at what consumer adoption can be, you know, what the use cases will end up permeating throughout our lives, both from our personal and enterprise and work perspective, the math that we put together today was really around trying to size us all. And what we did was, you know, we looked at that. different cohorts between developers, knowledge workers, which are basically everyone that works

excluding developers, as well as the developed market and developing market personal consumer base. And when we went through all this math and thought through, you know, what the attributable price and value could be to these different cohorts and what the penetration could be, you know, what struck us was, you know, there's maybe from a wide range of outcomes, but we got to an 87 billion of addressable market. And from Grockbot's perspective, we think. that they could do at least, you know, 17 billion of annual revenue over the next few years.

Again, a lot of assumptions that go into this. But the key thing about these numbers that I'm telling you is that 84% of what we put together really comes from the ordinary knowledge worker rather than developers or the consumer market that players like Meta are focusing on. So the big prize for Rockbot is being a product that's built into people's everyday work. I'm just checking the market cap for SpaceX now $2.15 trillion. You know, so, this IPO for what it's worth has actually done reasonably well in the near in the very immediate aftermath of going public have you used and cutgun thank you very much to appreciate that quickly call have you used starlink on a plane yet yes it changes the game i'm now looking at my flights based on what may have starlink do you know what's going on between united delta and musk about all this right now well musk went after delta because reportedly delta look delta reports next friday i think we're going to hear more about this uh stay tuned Coming up, it's the new hot skill on Wall Street. Why so many places on the street are paying up for employees who can do this.

We'll tell you what it is next. Wall Street's AI buildout is not just about them cutting costs. It's also creating a new race for talent. AI-related job posting at major banks jumped 49% this year. Demand is surging for people who can build and orchestrate AI agents across the business. And demand for one particular skill jumped 17. 100% last year. Husson wrote about this, joins us now.

All right, drum roll, what is the skill here? What do I need to go do? It is called agent orchestration. And what does that mean? So that's essentially, okay, you're abstracting out of process, whether that's approving a loan or making a regulatory filing like an S-1, into various steps, breaking that up into various steps, then assigning an agent to each step with each agent having a different permission in a different role

and having them all work together. Yeah. My analogy for this is parenting because you have all these toddlers who you kind of like in the house is not babyproofed and you have to kind of anyway. I get that. Show that full screen once again, people, because that was interesting. So agent orchestration is the number one in terms of growth. What is Langraph framework? So Langraph, I mean, these are really technical. These are tools and techniques that allow agents or AI models to extract data from a corporate enterprise. And I think if you look at the other ones responsible AI, AI governance, this is another impact of showing that AI, is actually going from the chatbot to actually doing things within an enterprise, which is

they need to govern. They need to put guardrails around it so you don't have rogue chat bots. I mean, you can imagine this is important enough in any industry, but especially the financial one. So I imagine that makes this all the more complex. I mean, I think any, as this explained to me, any time you try to take a process where humans are involved and have, you know, agents do it, there are going to be edge cases and there are going to be sort of opportunities for error. As you point out, there is really no sort of appetite for mistakes in finance. So it's going to take a couple years, but I think the process at the end will be interesting. What do you think? Let's bet on this. Oh. What do you think is going to

happen? Company, it's, I don't want to name any examples. Financial Services Company hires a bunch of new people to orchestrate their fleet of agents and, you know, the number of people in man hours that goes into that versus if they just did it the old-fashioned way. Where do you think we're going to be in five years? Are they going to regret all this and go, you know what? It just made sense to have that person putting together those slide decks or preparing those S-1s because managing these agents is is less efficient? I think you're making the machine that automates the work in finances a ton of repetitive like knowledge work. And I think, you know, in five years, I think revenue is going to go like this. It's going to go up and headcount. It's going to be flat.

I like his prediction. Okay. I'm not sure what we were betting on. People, well, it was like, would you bet on the old way or the new way as being more efficient? And it sounds like you're saying they're pretty sure this is going to be more efficient. What it means for new hires, for instance, out of college, I don't know. I think they have to be comfortable with AI, working alongside AI. Yeah. Thank you. Great stuff. Read that on CBC.com as well. Coming up, 60 million kids getting into the stock market. It looks like it's happening. We'll talk about it with the CEO of, you know, America's favorite government agency, at least Kelly's, the IRS. Frank Fisignau. Next. All right, let's talk about giving

your kids a head start on Wall Street. The Trump administration now auto-enrolling more than 60 million children in the new Trump accounts. Those are investment accounts for all kids under the age of 18. And for kids born between January 1st of last year and December 31st of 2028, U.S. Treasury, taxpayers, will kick in $1,000. But even with the automatic set up in enrollment, you still need to claim your child's account. Joining us for more is Frank Bizignano. He's the CEO of The Internal Revenue Service. We're not going to hold that against you, though, Frank. Also, Commissioner of the Social Security Administration, former CEO of FISA,

leading the next phase of the expansion of Trump accounts, because, and the reason people might be saying, Frank, why is the CEO of the IRS here to talk about Trump accounts to set up these accounts? You go through your agency. It's Form 45, 47, I believe it is. How do people access these accounts? How can we make sure that everybody who's eligible, is getting that $1,000? Yes, well, first of all, I think by mid-October,

you should expect us to have 70 million accounts auto-enrolled. And we have a few, 7 million who actually already gave us a 45-47 really activating their accounts, including those from birth. We're communicating with everyone who has not, given us, we know from Social Security, who we issued cards to when we're communicating with them to help them set them up. You should expect 25 million accounts to be funded by the middle of October with a great generosity and a gift from Michael and Susan Dell, the good work of Brad Gershman, Indiana, who was really a founding member of this.

concept. So think about that. 70 million. We're in the first beginning innings here. We have 25 million that will be funded. And that's the beginning. We believe 72 companies have already signed up from matching grants to for newborns. Those are large companies. And we have many more donors that want to be part of it. And I don't want to put you on the spot. I don't know if you have the data available, but just roughly how many of these accounts, Frank, are sitting there opened that are not being tapped? You know, because if somebody is eligible for a $3,000 effectively, right? And then you multiply that over 20 years in the market. Your thousand make people like, lots of $1,000. In 20 or 30 years, it's tens of thousands of dollars with no new money added. How do we make sure those accounts

aren't just left dormant or forgotten like a suitcase at the airport? Yeah, well, you'll find us communicating to them. We also believe that our financial institution partners will be communicating to them, as will the tax preparers. We've talked to all the people that touch these people through the tax preparation process. So everybody's aligned to ensure that people are able to claim the money and, in fact, watch it grow. We have a great app that allows people to look at it on their phone,

and watch how it grows day to day. And, Frank, people are excited about the IRS app, obviously, of some of the America.gov features that were announced this week. Just quickly, kind of almost more to the backstory of you coming into the role, any comment on the shareholder lawsuits at FISAV, and some of what's happened there in the wake of your departure? Well, I've been gone there for quite some time, so, you know, I'm maniacally focused on what I came to do,

run Social Security, IRS, and now expand. on a Trump account, so I haven't spent any time. New coaching staff in a different company than the company I ran. Yeah, and trying to fix Social Security is more than a full-time job, I think. So, Frank, thank you for joining us this afternoon. We appreciate it. Thanks for having me. IRS CEO, Frank Bisignano.

Let's get to Dom Chou now for the CNBC News Update. Hi, Dom. Good afternoon, Kelly. Good afternoon, Brian. The Senate is set to vote on President Trump's proposed nuclear power pack with Saudi Arabia before December 13th. That's according to Democratic. Democratic Senator Jeff Merkley of Oregon, who says the chamber will study and weigh in on the

impact disagreement could have in driving a nuclear arms race. The Trump administration says the deal addresses all non-proliferation measures required by law. Meanwhile, Senator Merckley, Representative Alexandria Acosta Cortez and Senator Bernie Sanders unveiled a bill today to ban the use of flock surveillance cameras and other license plate readers. The AI-powered cameras have faced scrutiny over privacy concerns. The bill would prohibit federal agencies from using the cameras and block federal funding for state and local governments that use them. And the NFL has suspended San Francisco 49ers owner Jed York for six regular season games following his arrest in an Ohio prostitution sting. He will also have to pay $500,000

for violating the league's personal conduct policy. York said in a statement that he takes full responsibility and accepts the NFL's decision in full, Kelly. I'll send things back over to you. Thank you, Dom. Coming up, the ever-growing business of sports, we'll dive into NIL in college, league expansion, and more. Sports investor George Pine joins us in just a moment. Let us talk money and sports, because they are coming together in a way that we have never seen before and may never see again between massive jumps to the valuations for pro teams, the millions, now being paid to the top college athletes, even hundreds of thousands, to high school kids. some call it the Wild West period for athletics. Let's talk about it all with George Pine, a Bruin capital. And I'm not only wearing the Virginia Tech. I saw you trying to lean to get that.

I'm leaning. I'm trying to do this because, number one, we got a big game tonight, 4-0 Tech against 4-0 Pitt in the Berg. All my friends, the Berg, have a good time. Be careful. But your brother, Jim, is a legend at Virginia Tech. He was the center when I was there and played in the NFL. Captain and Frank's first bull team.

I mean, I used to go down. there. We might have been hanging out somewhere at the same time. Likely. I hope so. I hope so. So I had to wear this and sort of for a lot of reasons, George. Good to have you back on. You know, there's the Save College Sports Act. They're trying to make sure that these athletes and these young men do get paid, but there has to be some control. How do you see the line ultimately being drawn? Well, they're pros and cons. The proponents of the legislation would say, look, they're going to restrict the movement of the players, play five years, one, transfer, restrict the movement of the schools, as these schools have moved around,

trying to really hold back conference further consolidation. And restrict the movement of the coaches so they don't leave during the season, provide the ability for schools to pool meteorites, and provide some medical benefits as well to the players. Is it the right bill for the right time? I know nothing's perfect. Well, the opponents of the bill would say, you did a labor negotiation without labor representation. College football by any definition is the number two sport in America. And the amount of money going to the participants is relatively small compared to any other sports business in the world. So that's the opponents. And those are the pros. So I think the middle of the road is, don't let perfect be the enemy a good. It's

probably much better than what it is today. Yeah. It's pretty bad today. Would you say, I think, I guess everybody agrees. So you take a step in the right direction. Is there worry that if you had to tweak one thing about what's being proposed, what would it be? Because it still has to go through the house. You know, I've watched this. I've watched the Olympics, right? Remember there's a time in the Olympics? Only amateurs could play in the Olympics, and no one would watch.

Well, you know, that hockey game from the U.S.B. Canada, 25 million people watch a hockey game at 8 in the morning. And so I actually, I've come full circle. I think, you know, there's an enormous amount of value being created. And is that an equitable split? I'm not sure. And by the way, if you want rules and restrict movements, you can fairly bargain and collectively bargain. And look, the courts are also the father of a D1 athlete, as am I.

Yeah. Right. Your son played football at a very, very high level. Right. My daughter played at D1 sports as well in a high level. So I get it. We want people to be taking care of it. I guess what I worry about as a long-term fan.

I don't want somebody who's like Virginia Tech as their fifth team. Right. You know what I mean? And then the announcers are on TV going, well, he transferred from Duke. Before that, he was at Georgetown. And before that, he came to... If you bargained fairly with the players, you could put someone under a contract for a period of time

and they wouldn't move around. The reason they lose in court all the time is it's inequitable. So they aren't able to restrict players' movement because it's an inequitable situation. So people are going to the politicians to get relief because they can't get relief in the courts because it's not a winning argument.

So you could restrict movement if you bargain fairly, but there isn't a fair bargaining. So you're asking for the government to come in and step in and make laws, which may pass, and that's one way you're doing it. So if you want to restrict anyone's movement, you've got to pay them. So you would actually be in favor of letting people have more movement?

I'd actually be for a fair bargaining system where people could collectively bargain and have fair terms and conditions versus... It's kind of like a TV news anchor, right? You have a contract, in part to protect yourself, in part because the organization, your benevolent corporate overlord. Like they also, so everybody, the idea is that both parties win,

I think that's what you're suggesting, right? You can't just tell a kid you can't go to five schools. You want them to go to one school? You sign them for four years. You want them to go to two schools? You sign them for two years. That's one way, right? That's what the opponents of the bill.

The proponents of the bill are, this is a better solution than what's been here to date, and it does a lot of good things. It restricts the movement of the schools, the coaches, and the players, and it brings a good system. So I'm not against the other one. Those are the two approaches.

But George, do the players, and I know we're kind of speaking wildly here, right? But like, do the players as a whole want a four-year deal? Or would they rather test the market every year, right? Because they can be like a Trinidad Chambliss of Ole Miss, who came from Ferris State in Grand Rapids, Michigan. He's now on top of the college football world. I don't know. If you offered a kid a lot of money over four years, fairly, he probably takes it.

So the question is, those are the two approaches. Otherwise, you have what you have today, which are no rules, and anything can happen, which nobody likes. So I think what's been passed by the Senate has a lot of great attributes and could very well pass the House. And I think it'd end up in a better place. Well, you've gotten me thinking about the contract model. You know, as someone watching all of this and thinking, I don't know if this is the way we wanted college sports to go, but maybe there is some merit to going in that direction. But that sounds like it would be completely off the table now. At the moment.

But think about it. It's the number two sport in America, bigger than the NBA, bigger than Major League baseball, bigger than the National Hockey League. Think about how much those players share of the revenue. It's really pretty small when you look at it in those terms. On a different note, when I look at the work that Michael Ozanian and Alex Sherman here at CNBC are doing on valuations, doing great job. And every time they come out with a new valuation report, every team in like every sport is going up by a billion.

a billion dollars. Is there any sign of the top in the valuation of pro sports teams, whether it's British soccer, American football, the NBA, or anything else? Well, the values keep going up and up, but you have to take a step back. I mean, streaming has commoditized entertainment. So the competitors to sports are kind of diminishing, and sports is coming on strong. So you have a scarcity of asset. Your AI proof, you're not going to be disrupted by AI, you're going to be enhanced by AI. And It's the only thing that aggregates millions in the case of the World Cup billions of people around a particular subject. But is it, you know, are these people still in it?

If you're an owner, it's so fascinating because the values keep going up, but I'm not sure that the ownership and the results are all that great in terms of the winning records and a lot of different things have been tried. So I guess from the fans' point of view, how do you get, you know, successful teams and big valuations and kind of everything going well? Sometimes it feels like those things are at odds with one another. Yes, that's true. There are teams that are quite valuable that don't win very often. I'm not going to mention any names. Thank you.

And so that. Feel free to mention names. But the value proposition in sports today is high. It aggregates tens of millions of billions of people together around something they're passionate about. Look at look at our guest here. He's winning the hookies, right? We've got a four-and-o team against the four-no pit tonight. I wish I was in the burr maybe hanging out at tops.

You can get down there. It's not even three o'clock. Come on. His plane? Eight, nine-year. Oh, yeah. Delta and United, they're not getting me there. on time. By the way, this background, I feel like I might be at top of the stairs or was we called back

of the day. We should. We got all kinds of giant TVs quickly. To Kelly's point, is there a correlation between valuation and record? Does it matter if you win? It depends on the team and the situation, honestly. Some teams, it matters a lot. Some teams, it doesn't matter very much, depending on the brand of the team in the market. And as long as those TV providers keep paying up for sports rights. There's nothing better. It's, you know, the top 100 shows on television, 94 of them are football. And now you've got Netflix and others in the game. You're going to be watching tonight?

Absolutely. By the way, that's the best introduction to a sporting event in Blacksburg when that team runs on the field. Amazing. And I'm going to tell you, the stadium tonight, Lane is going to be rocking. It's going to register on the seismic scale, probably 2.2. Maybe we should make a bet on that. Pitt's had our number for the last few years. Hokies. I hope tonight is different. By the way, I got my buddy Tony out there might be watching.

You know who he is? He's a Pitt Panther. nothing but love for my pit friends, but tonight you have to go. You have to lose. So like buy a lot. George, thank you. My pleasure. Great to see you. Go, OK. Yeah, I'm going to keep this on for the rest of the show. All right, coming up, the big energy decision for the G7 that could alter the course of the Iran war. How's that for a pivot? We're next. All right, welcome back. Let's talk about the big energy story that is not just about the Strait of Hormuz or Iran. It is Europe's continued natural gas supply issues.

As you may know, we've been reporting on the story for over five years. And while Europe has been, saved by relatively mild weather the last few years. This year, the setup going into winter is different. The summer, hottest on record. That drove demand for the air conditioning and cooling that they do use. Not as much as us, but they do use it. That means more demand for natural gas to run the electricity, and that also means natural gas storage levels are below. Their five-year average. That graphic there, pay attention to the blue line. It's from Switzerland. Shows where Nat gas storage is now. It's even lower. That's the overall EU. That number even worse. for some specific countries, and it's not just about gas supplies, it's also about price. And while

prices have come down a little in the last few days, overall, they have doubled in a year, which means that if European power companies have to buy gas on the open market, they're going to have to pay a lot to get it. And of course, it is not just about the gas itself. As we reported last week, shipping costs all over the world also sky high. So if Europe has a long, cold winter, It is possible. There are very real worries about having enough natural gas to meet all demand. Relying on the weather is not a great strategy. That is the title piece of my newsletter this week. It's called Power Insider. You can read more by scanning the QR code on your screen. We're going to CBC.com slash power dash insider to sign up. We've also in that got a great long conversation with longtime energy insider and expert David Craig.

Speaking of which, diesel prices are moving lower as the G7 prepares to release up to 100 million barrels from its reserves. That move follows intensifying pressure from the Trump administration on Europe to tap its diesel stockpiles. The G7 says it stands ready to take further action if needed. You can see diesel futures down almost 3% today. European bond yields as well seeing a little bit of relief this could have something to do with it. More power lunch after the break. Welcome back and take a quick look at shares of Boeing, which have flipped to a 1% gain on the session. after the FAA says that software issue in certain Boeing 737 max flight computers is not a safety concern.

The FAA says a panel of safety experts made the determination after a thorough review because pilots remain in full control of the aircraft, Brian. Boeing's up, yeah, what, about eight-tenths of one percent? So, been a stock certainly to watch on a few different levels. And that could be helping the Dow right now, or is Nike still weighing with about a 4% decline? Dow is up a 230 points, though, as we move throughout the hour. afternoon. So a decent tone here across the board, really, even with rising bond yields, there's the 10-year treasury. I attributed all to the Hokies victory tonight. Kelly Evans, thank you very much, folks. Thank you for watching Power Lunch. Closing bell starts right now.