The Best One Yet - 🏀 “Flagrant” — LA Clippers financial foul. Uber vs Cybercab. Goodles’ $100M mac-&-cheese. +State Fair PE

Starting point is 00:00:00 This is Nick. This is Jack. It's Friday the real Friday. September 4th, and today's pod is the best one yet. This is a T-boy. The top three pop business news stories you need to know today. We got a three-day weekend here, but Jack, how was your golf game yesterday? People want to know. Four! Sounds like it didn't go that well, actually. Let's just say Claudia wishes he'd picked another ringer for his last night of men's league. Yeah, it's all in the hips. I told you it was all in the hips, Jack. I buried the first pole. Didn't even par anything after that. Jack ran out of animals after that. Yeties, we got three fantastic stories, though, for the coolest place of capitalism. Jack, what have we got on the T-boy?

Starting point is 00:00:37 Let's just hope I'm not kicked out of the wheel. For our first story, the Los Angeles Clippers just got the biggest punishment in NBA history. But one person didn't get punished, and that explains the whole Labor Day holiday. For our second story, Uber spent a decade fighting taxi unions. Now Uber's partnering with that. Because Tesla's new cybercabs have no steering wheel and no pedals. And our third and final story is Goodles noodles. The viral mac and cheese brand just got acquired by the oldest pasta company in the world.

Starting point is 00:01:05 And their secret strategy, what is it, Jack? April Fool's Day. No joke, real thing. But yeties, before we hit that wonderful mix of stories. Oh, what a mix of stories to go into the weekend. Love the mix, Jack. Forget Coachella. I'm not interested in Burning Man.

Starting point is 00:01:19 And no, I don't want to spend $71 on that drink at the U.S. Open. Because the most undervalued marketing moment of the year is actually the oldest. It's the state fair. The state fair, the humble state fair has now become the Super Bowl of selling baby. And Wall Street just realized it. We hope this doesn't mean dynamic pricing for the Ferris wheel ride. We do. A QR code? No. I'm not giving you my QR code. Jack, could you step on that box of straw and sprinkle on some context for us, please? The first state fair happened in 1841 in Syracuse, New York. Just outside New York City. All 50 states, they now have state fairs today, and yeah, we've been there. You pay nine bucks to see a 10-foot butter sculpture.

Starting point is 00:01:59 Orio wolf down a fried Oreo corn dog with cotton candy. Which you end up vomiting on the knockoff Looney Tunes roller coaster that you can't believe is still standing. That doesn't really look like Bugs Bunny, but it kind of looks like Bugs Bunny. The state fair was originally designed to promote the state's agricultural industry. Livestock, corn mazes, and good old-fashioned tractor rides, man. But now, Elf Beauty has arrived, sponsoring Texas's state fair. With an Elf Beauty 20-foot lip-bomb dispenser that's flavored like a pickle. Levi's is sponsoring Minnesota State Fair.

Starting point is 00:02:28 With a 55-foot cowboy statue and a custom jeans mini factory at the fair. Wegmans, Coca-Cola, Lucchese boots. Wow. They're all sponsoring state fairs this year. Old McDonald didn't have a farm. He had a shoe deal, Jack. Now, brands are realizing that state fairs are the perfect captive audience for discovery of your brand. Okay, but shh, Jack, you don't want to tell private equity about this.

Starting point is 00:02:51 Although, you know those traveling roller coasters? the company behind them is Cyprus Group. And whose Cyprus group, Jack? A New York private equity firm. Carnies, they're now wearing corporate branded Patagonias. Have fun at the state fair, Yetis. Sorry, I mean Goldman Sachs. Jamie, Jack, let's it on three stories.

Starting point is 00:03:11 Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is an norm. Jack Nick, that's it. I don't even think they need to press. Practice. 50% that's a fat tip. Tea Boy City on your at list. If you know, you know, because we're ready to go. We can't wait no more. So just start the show. Start the show.

Starting point is 00:03:39 First, a quick word from our sponsor. For our first story, the Los Angeles Clippers and their Microsoft CEO owner just got the biggest punishment in NBA history. But the biggest wrongdoer in this scandal is unpunishable. And Labor Day explains why. I checked the calendars yet. He's exactly one year ago. Podcaster Pablo Torre found out that the Los Angeles Clippers cheated to evade the salary cap. Yesterday, the Clippers found out their punishment. But first, some context.

Starting point is 00:04:16 Yeah, let's tip it off, Jack. You see, the 30 teams in the National Basketball Association have agreed to something called a salary cap. It's a rule to pay the players the same amount to keep the league more competitive. But Steve Bomber, the former Microsoft CEO and current owner of the Los Angeles Clippers, he cheated. He was the Microsoft CEO for 14 years. He's rich and he wants to win. So he participated in a scheme to bypass the salary.

Starting point is 00:04:39 And here's what he did. He signed Kawi Leonard, the two-time NBA Finals MVP, and it appeared he took a pay cut to play for this team. His hometown team. Yeah. But Kaui Leonard did not take a pay cut. No, what did he do, Jack? Not only did he get his salary from the Clippers,

Starting point is 00:04:55 he also got off-the-book's fake endorsement deals. Get this. Owner Steve Bomber personally paid $60 million. to a company if that company would pay Carwe $28 million to do nothing. It was a fake endorsement deal. It was not a. $28 million for a no-show job. The kind of deal that Tony Soprano would negotiate for his buddies.

Starting point is 00:05:15 Hey, got a goal. You see, the clipper circumvented the rules to pay Kaui above and beyond the salary cap, gaining, therefore, an unfair advantage. One year ago, Pablo Tori and his staff found out and won a Pulitzer Prize for their podcast. So here's the news, yeties. The NBA has just announced flagrant violations of this. those salary cap rules and the most severe punishment in basketball history. Nick, this makes Latrell Spreewell look like he got sent to his room.

Starting point is 00:05:39 They're dunking on the team here. I mean, it's so severe, Dennis Rodman's impressed by this, Jack. Now, the first part of the punishment is basketball. The Clippers lose their next five years of first-round draft picks. And two front office executives are getting suspended without pay, and Cawley Leonard gets a $700,000 fine. Plus, the team must pay a $30 million fine. That's like a million hot dogs, Jack.

Starting point is 00:05:59 And the Clippers must agree to five years of League Monarch. Basically, there's going to be a babysitter in the front office making sure they don't cheat it. Yeah, but what's the wildest part if you're a basketball fan, Jack? The Clippers already traded five first round draft picks in the first place to get Cowie Leonard in 2019. But now they're losing five more, so a total 10 first round draft picks have been taken away from the Clippers. Plus, the Clippers lost SGA in this trade, and they have not won a final. But besties, this is what we find fascinating to everyone whether or not you're a basketball fan. The punishment does not fit the crime.

Starting point is 00:06:32 because the key wrongdoer is actually unpunishable. Jack, you want to tell the besties, why are we thinking this is the perfect Labor Day story? Everyone punished in this story works for a living, except one. So Jack, what's the takeaway for all our buddies who want to make money? On Labor Day, this story shows the power of ownership. Yet these three people who work for a living got punished in this situation. Two of them lost paychecks, and one of them wrote a big fat check.

Starting point is 00:06:57 But there's one person at the Clippers organization, and only one person who does not receive a salary. That's Steve Balmer. The $30 million fine this billionaire will pay, it's 0.02% of his net worth. Jack, what's that equivalent to do exactly? The fine that the NBA imposed on Steve Bomber is equivalent to just $20 for a household earning $100 grand a year. It's basically a parking ticket, Jack.

Starting point is 00:07:17 It's a parking ticket. Yeah, he's suspended from team activities for the nine-month-long season, and that's basically just a vacation. Meanwhile, if his clippers grow in value conservatively, let's say, 5% per year, that's $375 million in appreciation. that he'll enjoy. And that 375 million new bucks, that's taxed at 0%. Doesn't know any taxes on that until he sells the team. What we're saying is this year, the Clippers will grow in value 10 times more than Steve Balmer has to pay as a fine. And that shows the power of ownership. Labor gets taxed at a high

Starting point is 00:07:50 rate. Salaries can be revoked and you can get fired. But owners basically pay no taxes if you have the right accountant and what you own can't be taken away. We're not saying that this is right yet, But this is the reality. Ownership has huge advantages, and that's how you grow wealthy. Owning property, stocks, or businesses, that's how you get ahead. Jack and I, we're like two of the hardest working people we know, but 364 days out of the year, that's owner's day. On Labor Day, this story shows the power of ownership. For our second story, Uber is falling behind in the self-driving race, so they're pretending to be anti-self-driving for now. Uber's actually done two complete strategic 180s.

Starting point is 00:08:33 The reverse Uno card. And you need to know about them. Yeties, last night, Tesla hosted a cybercap event down in lovely Austin, Texas. The title for the event was no wheels, no pedals. Because 23 months after unveiling the cyber cab, they christened the first

Starting point is 00:08:49 cybercabs with their first paid commercial rides. And spoiler, these new cybercabs, no wheels and no pedals. The car looks like James Bond's golden pistol from GoldenEye, a way sleeker-looking Waymo. Speaking of Waymo, Jack. Two days before Tesla's big cybercab event, Waymo launched in San Diego, Denver, and Tampa Bay.

Starting point is 00:09:10 That's right, Waymo is now robo-hailing from 14 different American cities. You know what that means? Uber, the Disruptor, is getting disrupted. So, Jack, what is Uber the Disrupted Disruptor doing now? They're partnering with taxi driver unions to stop self-driving cars. I'm sorry, hit the brakes and pause the pot. Wow, the irony is wild on that one, man. Because for years, for a decade, Uber was an outright war against taxi driver unions.

Starting point is 00:09:36 But now that the disruptors getting disrupted, Uber is throwing the old reverse Unokart on us. According to the Financial Times, Uber is asking lawmakers to require that ride hail companies have hybrid networks that combine self-driving cars with human-driven cars. Bessies, these laws, if implemented, would require Waymo and Tesla to put humans in the cars or partner up with Uber. It's such a self-serving move by Uber. In New Jersey, for example, Uber lobbyists propose that any app offering robot taxi rides also must have human drivers provide at least 85% of the rides. It's like if office buildings were now required to have human elevator men in the elevator with you.

Starting point is 00:10:14 It's a brazen, self-serving anti-innovation move that, yeah, will also protect some taxi drivers. So the taxi unions, they're suss, but they're reluctantly accepting Uber's sudden support. The enemy of my enemy is my buddy, I guess. But besties, let's sprinkle on more context. Uber was the OG move fast and break things, but now it's the move slow and humanize things. It's the double reverse Uno card. Uber is now pro-regulation and pro-human drivers. But again, for now.

Starting point is 00:10:40 Now, we love this analogy that the Lyft CEO David Risher shared on our show. This was great, Jack. He said that self-driving is like a title wave coming at the economy. Because, besties, you can either ride that self-driving wave or you'll get walloped by it. Now, while Uber tries to delay that title wave, as long as possible, with new rules and regulation. It's also simultaneously investing in surfboards to ride that wave, and it's a whole lot of surfboards, Jack. Uber has partnered with 15 self-driving companies across the world. 15 because Uber's hoping for a fragmented future where lots of different robotaxies

Starting point is 00:11:13 all find their passengers on the Uber app. Uber has always dreamed of a day that they can cut out the expensive human driver from their business model. But now Uber's realizing that they could be the ones left out. The stock is down 18% in the last 12 months. this chassis is struggling. And that, that is why Uber is pulling a strategic 180 double uno reverse card. Uber is partnering with its old enemies, taxi drivers and regulators. Again, for now. And the reason is our takeaway. So Jack, can you toss that puppy into drive mode and tell us what's the takeaway for our buddies over at Uber? The app is no longer an asset. Yeties, for 100 years, the Detroit Big Three had been Ford, GM, and Chrysler.

Starting point is 00:11:56 But now the big three are Tesla, Waymo, and Uber. But to compete against Tesla and Waymo, which are trillion-dollar companies, Uber, they can't just be an app. That's why Uber has had to commit $10 billion to build stuff, physical stuff. Physically, we're talking Rivian, Neuro, Lucid. Uber has committed to build and buy at least 35,000 of those cars each, all driverless. So Uber's second Strategic 180 is going from an asset-light app-only middleman that takes 20% affairs to a $10 billion fleet of 100,000 robotaxies from 15 different companies. To compete with the big boys, Uber can't just be an app anymore.

Starting point is 00:12:32 It's got to go from clicks to bricks. Let us know what you think of the comments, and Jack and I will take a short break. Now a quick word from our sponsor. For our third and final story before the weekend, Goodles and Noodles, the Mac and Cheese startup was just acquired by the biggest pasta business on Earth. Because Goodles turned April Fool's Day into Growth Day. A lord of lasagna, the prince of papar deli. Fun fact from Nick, by the way, any Italian food that ends with the letter E, you're supposed to pronounce that E.

Starting point is 00:13:07 Oh, you got to own the vowel jack. Every vowel gets a minute of their moment in time. Also a fun fact, one out of three pena pasta pieces you've put in your mouth was made by one company. Barilla. Barilla. A 150-year-old family-owned Italian pasta brand. It's actually the oldest and biggest pasta seller on planet Earth. They do $5 billion a year in carbs, I mean sales.

Starting point is 00:13:29 They have a monopoly on macaroni. Italy runs on barilla pasta. Or does it? Because the oldest pasta brand just acquired the youngest. Goodles noodles. Goodles noodles founded during the pandemic as a better for you millennial mac and cheese company. The box looks like a disco ball. Oh, that's a clean disco ball, Jack.

Starting point is 00:13:49 When I first saw the Googles box, I thought, oh, this is mac and cheese, but it must be less processed than craft. I thought it was a Pop-Tart, Jack. I mean, what sweet green did for fast food, only did for milk, what Harries did to Razors, Goodles is doing to Kraft Heinz. Operation OutCraftCraft. Because Goodles is now doing $88 million in revenue a year

Starting point is 00:14:08 and is profitable. And those numbers are from three years ago. And since then, sales have gone from Al dente to boiling. Goodles is now eating Kraft's lunch, literally. Because Kraft's market share of mac and cheese fell from 45% of the market to 39% since 2022. And all six percentage points of that, market share shrinkage has gone to Goodall's noodles. But yet he's like lasagna. This story has layers.

Starting point is 00:14:31 Yeah, this is way deeper than like a healthy brand of pasta store. There are plenty of those healthy pastas out there. Now, yes, Goudles was early on the protein maxing trend. They stuffed their tubes with grams of protein, naturally. And yes, Goudel benefited from their celebrity-backed muscle. And they added actress Gow as a co-founder a few years ago. More important than those, though, is that Goodles realized the top-paying customer was hiding. They were hiding. You see, Kraft Hines and General Mills, they target children in their mac and cheese branding. The box looks like a kindergarten toy. SpongeBob and Disney characters, that is microwavable kid culture.

Starting point is 00:15:05 But Goodles bet that there was a hidden audience of grown-up mac and cheese fans as well. 20 or 30-year-olds who wanted to devour their old comfort food, but not with noodles shaped like telitubbies. So Goodles designed their box to appeal to adults, and then they jacked up the price to be twice as much as craft. The box made it feel grown up, and the higher price made it feel premium. And then they added sophisticated flavors like truffle and greer that would break a kid's palate. Wilder would dump the mac and cheese on my head if there was greer in it. You see, the midlife mac and cheese eaters, they were out there, but no one was speaking to them, so they were hidden. Goodles took a risk, bet that they existed, and they did.

Starting point is 00:15:44 Besties, we have heard of startups in stealth mode before, but sometimes customers can be in stealth mode too. So Jack, what's the takeaway for all our buddies? Slurping and licking. No slurping on the pod. I'm in the pot pelted box now, Jack, what's the takeaway for all our buddies over at Goodles' noodles? If you can't outspend the competition, outweird them. Outweird them. Yeah, he's, that's a quote from the Goodles co-founder, because while Goudles couldn't spend what Kraft could, they did have a higher risk tolerance.

Starting point is 00:16:12 Goodles was willing to get weird with their marketing, which Kraft's lawyers would never. Okay, but the most unique and strategic weird moves that this company made, it happened on April Fools. Every April Fool's, Google switched their flavor names. Like, the Asiago-flavored mac and cheese became Kiss My Asiago. They also changed the names to smack my Mac and sneezy, cheesy for that day. Real sellable flavors just changed the names for April Fool's. Jack, there is no way that $30 billion craft hines has the logistical or legal flexibility to put the word ass on a mac and cheese box. Understandably so.

Starting point is 00:16:48 They don't want to upset their long-lasting customers who serve their kids. Or a reference to spanking. But get this, Goodle's sales jumped 20% on the first day of every April, every year, because of that April Fool stunt. Goodles turned April Fool's from a joke to a growth hack to a competitive advantage. And that is why they're now selling for probably nine digits. Jack could do a whip-up takeaways for us for the three-day weekend. Pablo Tori's investigation resulted in the NBA's biggest punishment ever. On this Labor Day, the Clippers drama shows the power of ownership.

Starting point is 00:17:21 For our second story, Uber has pulled two strategic 180s. It's now pro-regulation and taxi driver unions, and it's building a fleet of cars. No reversals or no cards. To survive against Tesla and Waymo, they got to go from clicks to bricks. And our third and final story is Goodles Noodles. It sold to Borilla for an undisclosed price. Because Goodles bet grown-ups wanted mac and cheese, too, so they turned April fools into their growth hack. But besties, this pod's not over yet.

Starting point is 00:17:47 Here's what else you need to know today. First, OpenAI says they have won the race to AGI, aka Super Intelligence. They released Astra, their new large language model, and Open AI believes they've achieved artificial general intelligence, AGI. AGI, artificial general intelligence. That's smartness on par with a human being just like us. If true, huge. Because for the last four years, all the AI leaders have been obsessed about the race to artificial

Starting point is 00:18:13 general intelligence. Time will tell if Sam's really won this war, or if they're exaggerating a bit, we'll figure out what it all means and how much was rounded up. Second, the Dutch are pulling 78 tons of gold out of the United States. Gold. Not like trading this gold. They are physically moving 156,000 pounds of gold physically. Did you just mathematically do 78 tons to 156,000 pounds? Not in my head. Had it ridden on some crib notes I had right here on the pod check. It's $11 billion worth of gold, and it's being shipped out of the U.S.

Starting point is 00:18:44 Sounds like the plot of the next Fast and Furious. They say it's because of political unrest in the United States, but we think this is all just the plot of the next Vin Diesel or Dan Brown movie. That's our theory. And finally, you can now get through airport security to meet a loved one at the gate. Jack, didn't your Nana used to do this for you? Oh, yeah. Every time I walked off the plane at Fort Myers Airport,

Starting point is 00:19:02 I'd go up the tarmac and Nana would be right there greeting me with a gigantic hug. Nana would even show up on business trips for Jack. Like, even airports she wasn't even at. She'd just show up and give a hug there. Now, that all ended on 9-11, of course. only ticketed passengers could get through TSA after that. But now you can apply for a gate side by TSA pre-check so you can get through TSA without a ticket.

Starting point is 00:19:22 Because love actually is everywhere. Now time for the best fact yet. This one sent in by Andre over in Queens, New York. We just got the numbers from the U.S. Open and the honey-duce sales in particular. Oh, the most profitable cocktail of all time. It's a profit, puppy. Last year, the Open sold 738,459 honey juices.

Starting point is 00:19:42 Wow. In 10 days. That's how many of these drinks were sold in 10 days last year. That is an all-time high of $17 million in revenue. And they had to fly in 17,000 cases of melon from California to Queens just for the garnish. They filled eight semi-trucks of melons just for that garnish. Because the green melons are shaped into little tennis balls that stick onto the top of the drink. And if you didn't Instagram a picture of that honey deuce, then did you even go to the U.S. Open?

Starting point is 00:20:09 Yeties, you're looking fantastic before this three-day weekend. And if you're going to a state fair, send us a pick. If you're going to the U.S. Open, send us a pick. If you beat Jack's golf score, send us a pick. I really disappointed my father-in-law. Where are you going this weekend, Jack? Are you making up for that previous game for your father-in-law? I actually might play golf again.

Starting point is 00:20:30 You're right. I'm going to the valley. I'm going to the chalet. Okay, there we go. There we go. What a win. What a win. Yeties, we hope you have a blast.

Starting point is 00:20:36 If you haven't yet, drop down to give us five stars, a rating and review. That is how we grow the show. And we still got some tickets to our San Francisco Live show. on September 23rd. Perfect Labor Day gift for yourself. Go to T-Boypod.com and Jack and I, we'll see you for T-Boy Tuesday. And before we go, a happy birthday to legendary Yeti, Levi Haas, who's got a bar mitzvah weekend down in Cleveland, Ohio. Happy birthday to Barney Lopez, turning 40 years old over in Albuquerque.

Starting point is 00:21:04 And Kevin Borkin and Rosewell, Georgia, just outside Atlanta, has the best birthday yet. Happy birthday to Billy Kushner on Long Island. And Melanie Sadler in Knoxville, Tennessee, we see your celebratory birthday. Happy birthday to Izzy Baker in Skinny Atleast, New York. And Marina Siorgia down in Arkansas, Di Huele la Cola, according to your family. Congratulations to Gab's Bostos, who's graduating with a marketing degree in Puerto Aligra, Brazil.

Starting point is 00:21:27 And Chris Ugarte in Frisco, Texas, just got promoted to senior regulatory affairs program lead down at Johnson & Johnson. Happy 16-year anniversary to Ruby and Laney, eight years with T-Boy celebrating in Los Altos Hills, California. And a congratulations to another year of the note team over in New York City in Sweden. And thank you to Matthew Hawkins,

Starting point is 00:21:46 Because remember, I found it incredulous that you need to change your smoke alarm every six months. Yeah, yeah. I was like, I must be doing something wrong. Well, I clarify correction for us. You only need to change the batteries every six months. You don't need to change the alarm for seven to ten years. Actually, my smoke alarms are connected hardwired to the electricity. So that's why I've never changed the batteries.

Starting point is 00:22:05 Beep. Oh, we got to go now, Jack. Beep. We've got double-A's. This is Jack. I own stock of Lyft and Ford.

The Best One Yet - 🏀 “Flagrant” — LA Clippers financial foul. Uber vs Cybercab. Goodles’ $100M mac-&-cheese. +State Fair PE

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