The Best One Yet - 🚗 “Why Elon should sell” — The Tesla solution. Boston Celtics’ fine print. Fashion coffee chains

Starting point is 00:00:00 This is Nick. This is Jack. Welcome back. It is Monday, March 24th. 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. Is your tucks ready?

Starting point is 00:00:15 I'm sorry, is your tugs fitting over there? I think I forgot to send it to the dry cleaner. Yet is Jack and I are whipping out our tuxes in one week in Chicago. What are we going to be doing there, Jack? We're going to an award ceremony. We are. The best idea yet got nominated for Best Business Podcast. It's very exciting.

Starting point is 00:00:32 There's stiff competition. We don't know if we're going to win or not. No idea. We've prepared speeches either way. The speeches, by the way, I think they're like 30 seconds. That's how much time we go. More on that soon. In the meantime, we're celebrating the wins.

Starting point is 00:00:44 Thanks for helping us get nominated. Jack, three stories for today's show. What do we got in the team? For our first story, Tesla is officially the worst stock in the S&P 500 this year. And a record number of Tesla owners are trading in their cars. But we think we found the Tesla solution, and it's not, shame. the CEO. For our second story, the Boston Celtics sold for a record price for any North American sports franchise. But we found one huge problem in the fine print, a flagrant problem. And our third

Starting point is 00:01:13 and final story, Gucci, H&M, and Ralph Lauren. Every fashion brand is launching a coffee chain. Jack, why are clothing companies getting into coffee these days? Because of our favorite rule about sales. Never be selling. But yeties, before we hit that wonderful mix of story, Stories. Fantastic mix of stories for a Monday. Jack, wait, one second, I'm checking the calendars here. Happy one month birthday to your new baby boy man. Thank you. Oakley was born one month and one day ago. Now, Jack, in honor of your baby's one month birthday, I happened to have prepared a poem for him. You haven't. Oh, yeah, it's a financial poem, all right? I can't wait. All right, here we go. Here we go. Jack, your son has arrived. He's a shining little beauty. But can we talk financial planning for this charming little cutie?

Starting point is 00:02:00 because in this economy, the price of school hit all-time high is going to have to sell that Bitcoin when the college bills fly. So I came up with the plan during your paternity vacation. A financial strategy, that's the ultimate solution. I spoke to three accountants and they say my plan's super fine. I'm hooking up your son with a 529. A 529 plan. It's an education strategy.

Starting point is 00:02:24 It lets your money grow tax-free, completely. As long as you spend it on a university or K-12 programs where tuition isn't free. So you put your money in this fund invested in some stocks. For your son, I bought 10 shares of crocs. So I won't pay capital gains if crocs stock price grows. That's the advantage of 529 portfolios. Wow. 529s, they don't pay federal or state taxes as long as the proceeds go to qualified school expenses. So hopefully when he graduates, this thing is worth a melee. If your kid don't get a 529, I'd probably just feel silly. Some mic drop. Mic drop.

Starting point is 00:03:02 That was insane, dude. Channeling some Kendrick on that. This boy's future is going to be built on a foundation of financial responsibility. Congratulations on the one-month birthday. You and Alex are doing amazing, Jack. Thank you, Nick. I can't wait to play this for Oakley. That was friggin' awesome.

Starting point is 00:03:19 I just dropped 10 shares of Crocs in that 529. This is Jack. My son Oakley now owns Stock and Crocs. Jack, let's hit our three stories. 15 years before this song, two boys from the Northeast. met in the dorm. They had an idea that caused 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 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

Starting point is 00:03:47 wait no more, so just start to show. First, a quick word from our sponsor. For our first story, Tesla is officially the worst performing stock in the S&P 500 so far this year. So we listened to Elon's All Hands event last week, and we have one idea to save the company. Sell the company. Now, yet it is last week, Elon Musk took the stage in Austin, Texas to address the company's employees of Tesla in a surprise all hands meeting. We listened to the whole thing, and it was all rosy. Yeah, it sounded pretty good, pretty positive, pretty fun actually. And it is true. Tesla has a lot to boast about. Nick, did you know that the Model Y is the number one selling car model on Earth for the last two years?

Starting point is 00:04:45 Full disclosure, we've leased a Model Y and understand it's a great car. Elon told the Tesla employees that they're entering an age of abundance for all. He said that AI and humanoid robots are going to be the key to that abundance. Tesla AI and Tesla humanoid robots. He then went on to say that the future is autonomous. And he said that in five years, autonomous Tesla. will be everywhere. As Elon pointed out, there is an entire fleet of seven million Tesla cars across the world capable of full self-driving. And he said last week, someday he's going to flick on

Starting point is 00:05:17 the light switch and make them all self-driving. Elon is so bullish right now on Tesla. He even asked employees to not sell their shares. He literally said, hang on to your stock. It was quite a pep rally to boost the morale of employees. Here's a quick clip to give you a sense of this big Tesla event. We work together in a way that allows us to ask the hard to questions. This is the product that will retire fossil fuels. Now, Yetis, Jack and I, on your behalf, listen to the entire Q&A of this meeting. And they didn't really ask many hard questions. Would you say that, Jack? Here's a hard question they could have asked. Elon, if we're trying to retire fossil fuels, why is your boss in the White House doing the opposite? Well, they didn't ask

Starting point is 00:06:00 tough questions because it was all rosy, it was all positive. It was, frankly, the most Pepp Raleigh Tesla all hands we've ever heard. On the other hand, in the news headlines, Tesla's getting totaled right now. Tesla is going through the worst period in the history of the car. The stock is down 50% from its December all-time high. It's the worst performing stock in the S&P 500. Tesla's sales in Europe and China are down 50% so far this year. Meanwhile, BYD, its Chinese rival, watched a superior technology last week. Yeah, their charger can charge four times faster than Tesla's chargers. And cyber truck? It's become a cluster truck. Yeah, they just recalled nearly all 46,000 cyber trucks because a panel apparently falls off if you're driving on the highway. And here's the

Starting point is 00:06:44 worst part. The Tesla trade-in news. Progressives who tend to buy Teslas don't want them anymore. That's right. Tesla owners are trading in their Teslas if they own them at record rates. We're talking three times higher rates than before the election. And yes, they've become targets of vandalism, too. Yeah. My aunt just bought a Tesla in Austin, Texas. Yeah, Jack? She's afraid it's going to get keyed or worse. Well, perfect timing because next week, Tesla is actually going to reveal its Q1 sales. And Wall Street expects the biggest shrinkage in Tesla history. And that's why we just had this cheerleader-style pep rally with Elon Musk at the Tesla All Hands to change the narrative. He's trying to convince his employees that the number of cars they sell don't matter anymore

Starting point is 00:07:26 because the future is robotics and AI. But honestly, the much bigger narrative change that we're noticing is that Tesla bulls are going reverse on Elon Musk. They're getting frustrated that Tesla stock is down and the sales numbers are too. So we came up with the solution. Jack, what's the takeaway for our buddies over at Tesla? The only way to fix Tesla's brand crisis is if Elon sells all his Tesla stock. Yeties, big question right now, should Elon make someone else the CEO of Tesla? Well, honestly, we don't think that would make a difference, and we got the proof. Elon made someone else the CEO of X and SpaceX, but both of those companies are still perceived by the public as Elon companies.

Starting point is 00:08:10 Exactly, yeah, another human being runs those businesses day to day and make sure they're still kicking over at SpaceX. But since Elon is the biggest shareholder of both X and SpaceX, he's the boss. Yeah. They're still his companies. So when you add it up, whether Elon is CEO or not, doesn't really matter. If Elon owns the stock, then he is part of it.

Starting point is 00:08:29 of the brand. Now, you might think to yourself, Elon would never sell his Tesla shares. Right. A lot of people would point that out, Jack. But guess what? He sold his PayPal shares, another company he co-founded. True. And he used that money to start Tesla. So we think Elon could sell his Tesla shares and then use that money to do something he's more excited about. Like go to Mars. That would let Tesla, a fantastic electric car company, go forward without the incredible political baggage it has today. Besties, the only way Tesla's brand crisis can be fixed. is if Elon sells his Tesla shares. Our second story, last week, the biggest sale in North American sports history went down.

Starting point is 00:09:12 The Bast and Celtics sold for $7 billion. We read the fine print of the deal over the weekend. We did. And this deal defies logic. Totally. There's one giant thing missing in the purchase. But that's exactly. All right, Jack, let's look at the roster here starting lineup.

Starting point is 00:09:30 I got Bill Russell, Larry Bird, Paul Pierce, and some pot-bellied Irish. who's scaring kids at the games? Oh, you forgot to mention Antoine Walker. Ah, yes, I did. That is the Boston Celtics. They're one of the top franchises in all of sports. They've retired so many jerseys, they're running out of numbers. Yeah, now, even though that parquet court is a visual crime...

Starting point is 00:09:50 Whoa, whoa, whoa, whoa, whoa, whoa. I kind of like the Parquet floor. It kind of gives me vertigo. The Boston Celtics have won more championships than any other team in basketball. The Celtics have 18. The Lakers have 17. But here's the news. for $7.3 billion once the sale is complete, the Boston Celtics are changing hands.

Starting point is 00:10:09 And this sets a record. It beats the 2023 sale of the Washington Commanders, which sold for $6.1 billion. Yeah, at the time, that was the biggest sale paid for any North American sports team. Now, first, let's look at the seller. The seller bought the Celtics in 2002 for just $360 million, which looks like pennies like today. I think we could put together that money like tonight. Selling for $7.3 billion means he notched a 16,000% return on 23 years owning the Celtics. But Jack, who's the buyer in this situation of the new Boston Celtics? Classic, a private equity guy. He went to Dartmouth and Wharton.

Starting point is 00:10:46 His NBA came with an MBA. Celtic superfan Bill Simmons doesn't even know how to pronounce this new owner's name. He's kind of a private equity guy who came out of nowhere after assembling a team of financial dudes from just outside Boston. But yet, here's what Jack and I found fascinating about the story. We think this private equity guy forgot to have the analysts look at the term sheet. Because the deal does not include one of the most important parts of this sports business. The real estate. This deal to buy the Celtics doesn't include the arena.

Starting point is 00:11:19 Right. The arena. And the arena is the profit puppy. Exactly, Jack. The Boston Celtics do not, in fact, own the TD Garden where they play their games. The Boston Bruins do. Yeah. So this happens to be the rare case where the ice hockey team is calling the shots on the basketball team. The Celtics have to ask the Bruins permission to use the arena. Yeah, it's like they got to call up the goalie if they want to practice. Hey, you guys mind if we get on? You guys still playing? You still skating out there?

Starting point is 00:11:45 And not owning the arena is a huge deal economically. Real estate is how pro sports teams make the most money. Home teams, they only play 41 of their games at home in a given regular season. So for a basketball arena, it's got 324 days a year to rent out for other events. Yeah, concert, circuses, professional bullfighting leagues. They all come into town. They all got to pay to use that arena. The TV deal is where they make the most money. But after that, events is where you turn a profit.

Starting point is 00:12:13 A funny thing there, Jack. Speaking of not making money, the Celtics organization is pretty good at turning pots of gold into pots of nothing. I think what you're trying to say is they're expected to lose money this season. Get this, Yetis, the Celtics spend $250 million on their payroll and $150 million on the luxury tax to the league. It's the highest costs in those two departments in the whole league, and they're probably not going to profit this year. So in many respects, the Celtics are one of the least profitable teams in the entire NBA. They're winning games, but they're not winning income statements. Yeah, they're beating the Knicks, but they're losing in the spreadsheets, man.

Starting point is 00:12:51 Oh, and to boot, this deal to buy the Celtics doesn't give the new owner front office control until 2028. So Jack, add it all up and the Boston Celtics are not profitable. They're not gaining front office control for three more years and they're getting no lucky charms as part of this acquisition deal. And yet, it's sold for a record price. How could that be? How you like Dem Apples? We don't. We don't like Dem Apples. So Jack, what's the takeaway for our buddies over at the Boston Celtics? Sports teams aren't businesses. They're collector's items. Yeah, it is, Jack and I have said before that pro sports teams are the most scarce asset in our economy. Like land, pro sports franchises are a finite resource. There are only 32 in each league.

Starting point is 00:13:37 Plus, sports teams provide a unique form of influence, a cultural influence, and that's valuable. So most people buy things looking for a profit or a return, but sometimes people buy things just for the power it gives them. So you know what, next time a good team and a big city comes up for sale, we bet they'll set a record price too for these exact same reasons. Whether the team makes money or loses money, that's irrelevant to the billionaire that's going to buy them. Because the buyers don't look at teams as businesses, they look at them as collector's items. Now a quick word from our sponsor. For our third and final story, the hottest new trend in fashion isn't fashion at all.

Starting point is 00:14:20 It's actually coffee shops. From Gucci to Zara, fashion houses are launching coffee chains. Because the best salesmen don't sell. No, they don't. But Jack, you know I'm not a coffee guy, but last time I was in the city, met up with a few friends at a classic coffee shop, 72nd of Madison, beautiful limestone building,

Starting point is 00:14:42 really, really good stuff. The lattes cost you double digits. The place looks like it's been around for 50 years. But here's the thing, Jack. It actually has only been around for nine years. It's not classic, and it's owned by Ralph Lauren, the apparel company. That's right.

Starting point is 00:14:55 Nick's boots on the ground reporting. discovered Ralph's coffee, a coffee chain with two dozen locations. Yeah, they're in New York, Hong Kong, Paris. They got the next one opening up in Bangkok soon. I've been going for years, and they roast a pretty good bean coming from a guy who doesn't drink coffee. It's called Ralph's, because it's owned by Ralph Lauren, the clothing company. Clothing company is doing coffee. The teddy bear is basically roasting the beans. Two surprising things about Ralph's coffee. First, most of them are not located inside bigger Ralph Lauren clothing stores. And their second strategic move, the branding. All the colors are green and white inside, not typical Ralph Lauren, blue and red.

Starting point is 00:15:31 So Jack, if you were to walk into a Ralph's and order a Ralphicino, you might not realize that it's actually the same company as the polo shirt. But it's not just Ralph's. No. We noticed every fashion house seems to be launching a low-key coffee chain. Get this, Yeti's, Fendi Cafe, Gucci Cafe, Prada, they're doing pastries right now. Each of those luxury houses has six or more coffee. shops. Coach, they're even opening a whole coffee shop in Texas. Oh, it's their fifth coffee shop. That's a chain. You can order a mugatu macchiato at these places. Yeah, Berberi's the new barista. Stella McCartney, she's the new Starbucks. You know that hot foamy latte makes me gassy. Capuccino's so hot right now. But it's not just high fashion either. Nick and I discovered that Zara also opened some coffee shops over in Spain. Pretty sure their espresso's cost more than the cute tops over at Zara. So why is fashion across the price spectrum side hustling with subtle coffee chains? Well, basically, we think the strategy here is the introduction to the brand. These coffee chains are the corporate equivalent of a handshake or an embrace.

Starting point is 00:16:40 You can't afford a $10,000 Gucci bag, but you can't afford the $10 Gucci lattes. And that way, you kind of get to no Gucci. Because Gucci chooses the tiles, the tables, the napkins, the cups, the coffee shop is your introduction to how Gucci thinks. now you've met Gucci. You understand Gucci's style without actually owning Gucci. It's quite a long-term marketing bet. It is, yeah. These are seeds the brands are planting, hoping that someday it blossoms into a splurge at their store. It's me. I'm Gucci. Nice to meet you. Let's talk in a few years. So, Jack, what's the takeaway for our buddies in fashion with coffee chains? Never be selling. Did you say that one more time to be clear, Jack? Never be selling.

Starting point is 00:17:25 That is, the number one rule in sales is ABC. Always be closing. As in, always be closing a sale. And we know how important sales is. Yeah. It's part of a role as a co-founder. But what fashion coffee houses prove is that maybe it's better to never be selling. That's why Gucci coffee doesn't sell Gucci bags. You experience what the Gucci brand stands for, but not what the Gucci brand literally sells. At no point are they pitching you on Gucci bags or Gucci shoes. They're just selling you Gucci coffee. The very fact that there is no selling involved, ironically, could sell you on the brand. It's an overlooked way to sell something. Never be selling. Never be selling. Jack, could you whip up

Starting point is 00:18:13 the takeaways for us to kick off the week? Elon's telling Tesla employees that everything's okay, but the data, the headlines and the stock say it's not. The only way to fix Tesla's brand crisis, Elon sells his stock. For our second story, the Boston. Celtics sold for a record price, even though it doesn't include the arena. Because sports teams are businesses. Sports teams are collector's items. And our third and final story, we spotted a trend. Yeah, we did. Fashion houses are opening coffee shops. They're intros to the brands. It's a sales strategy that we call Never Be Selling. But yeties, this pod's not over yet. Here's what else you need to know today. First, the IPO market is IPO. Whoa, it is heating up.

Starting point is 00:18:55 Stubhub. Just filed to go public. The team. its company is profitable and they want to be publicly traded. Klarna filed the week before, the Buy Now Pay Later firm. And Hinge Health, the virtual physical therapy firm, they filed to go public too. New stocks are coming to the market and we're excited to cover them. And second, J.P. Morgan Chase is renaming its DEI programs as D-O-I. Diversity, opportunity, and inclusion. Yeah, interesting. So they subbed out of vowel here, Jack.

Starting point is 00:19:21 J.P. Morgan said the E always meant equal opportunity for us, not equal outcomes. Finally, Finland is once again the happiest country in the world while the United States happiness fell. Despite it being 12 degrees up there right now. And them having no sunlight. Somehow Finland is the number one happiest country for the eighth year in a row. Could we get a recount on those Finns, please? I think it must be the sonas. It must be the sonas.

Starting point is 00:19:48 The World Happiness Survey also found that the United States fell to its lowest level ever, 24th happiness place. Politics, election year, inflation. Yeah, Americans are still figuring it out. Now, time for the best fact. Yeah, this one whipped up by Jack and I because this is trivia. Trivia. What billion-dollar snack brand

Starting point is 00:20:10 began as a gift from a man to his wife? And as an extra hint, that gift he gave her was specifically based on her horoscope. Double hint? Her astrological sign was Pisces. All right, let me add it all up for you here. So which billion dollar snack food company began as a romantic gesture for a Pisces?

Starting point is 00:20:30 The answer? We'll reveal it in tomorrow's pod. Because that answer is also the subject of our next episode of the best idea yet. Which we got nominated for an Emmy Award for. Sorry, not Emmy. Amby Award. Let's just run with Emmy. Not the fact checkers deal with that one, Jack.

Starting point is 00:20:46 Yeah, it is. You look fantastic to start the week. Jack, you are glowing over there. And let me just say to you, so hopefully when he graduates, this thing is worth a millie. If your kid don't get a 529, I'd probably just feel silly. Are you Lynn Manuel Miranda or you're Nick Martel? Well, I spoke to three accountants. They say the plan is fine, so I'm hooking up your son with a 529. You are Hamilton. He was a Treasury Secretary. He got finance.

Starting point is 00:21:11 It all comes full circle check. Besties, the best thing you can do to help and support the show. Drop down to give us five stars and a review. And remember to follow us so you get T-Boy every day. Nick and I will see you tomorrow. Can't wait. And before we go, a happy birthday to Yeti, Camille Gibson down in Denver, who's been listening to T-Boy for five years and is on a fantastic walk right now. Happy birthday to Heather Keword from Auburn, New York. She's a clinical IT specialist who is crushing it.

Starting point is 00:21:44 And Lillianna Servantes is turning 32 years old over in the little big town of Reno Nevada. Happy birthday to George Goodfriend, who's obsessed with his last name, but it also means a lot of pressure to be a good friend. And a happy birthday to Matt Allen and Carson Valley Nevada, 20 years retired Black Hawk helicopter pilot still flying a fixed win. Happy birthday to Jeremy Cougall in Silver Spring Melland, who's hosting a Clementine eating contest for his birthday. I can't even open those things, Jack.

Starting point is 00:22:13 And Caitlin Schmidt in St. Pete, Florida, has got a new fiancé and is celebrating the birthday. And a big shout-out to Collett in Kuwait, legendary Yeti, who's launching a luxury assets exchange platform. Congratulations on the launch, Collette. And Kinceo down in Seattle has got a boring business to share. They acquired a marketing agency, and they are scaling that thing. I think her goal is to make it not boring. Well put, Jack.

Starting point is 00:22:37 And Jacqueline Pittenger down in Nashville has got a new job, so we are celebrating your win, Jacqueline. And to anyone else, celebrating something today, make it a T-Boy. Celebrate the wins. This is Jack. I apparently own stock of crocs now because the 529 doesn't switch to Oakley's name until he turns 18. Yeah, for benefit of, or I believe it's a little bit of. I know.

The Best One Yet - 🚗 “Why Elon should sell” — The Tesla solution. Boston Celtics’ fine print. Fashion coffee chains

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