The Prof G Pod with Scott Galloway - Prof G Markets: The FDIC Limit, the Coinbase Lawsuit, and the Business of Formula 1

Episode Date: May 8, 2023

This week on Prof G Markets, Scott shares his thoughts on Vice’s imminent bankruptcy, Hindenburg’s latest short position, and Chegg’s battered stock. He then discusses raising the FDIC limit and the potential consolidation of the banking industry, and weighs in on a lawsuit accusing Coinbase insiders of dumping shares soon after its direct listing. Finally, he discusses the growing success of Formula 1 in the U.S., and tells a story of his time at the Miami race last year. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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cards, savings accounts, mortgage rates, and more. NerdWallet, finance smarter. NerdWallet Compare Incorporated. NMLS 1617539. This week's number 15. That's how many times bigger Buckingham Palace is than the White House. True story, when you turn 100 in the United Kingdom, you get a letter from the Queen. When you turn 16, you get a text from Prince Andrew. Welcome to Prop G Markets. Today, we're discussing more trouble in regional banking, Coinbase's shareholder lawsuit, and the Miami Formula One Grand Prix. Here with the news is Prop G media analyst Ed Elson. Ed, I couldn't decide. I was trying to end the joke. I was trying to figure out a way to call Harry and Meghan those Instagram-loving bitches. What I can't wrap my head around is why every

single joke has to be a sex joke about, I mean, what was last week? Last week was a sex joke about dead people. Was that right yeah the more also scott you have told that joke before i will say i know but you gotta recycle the good stuff you gotta recycle the good stuff anyways enough of this enough of heckling from the cheap seats from the 22 year olds i don't know if you guys know this but you should look at who signs the front of your checks his name is dog that's. That's true. D-A-W-G. Anyways, Ed, break down the headlines. Okay, let's start with our weekly review of market vitals. The S&P 500 posted a week of losses. The dollar also fell. Bitcoin climbed. And the yield on

10-year treasuries slid through the week before surging on the latest jobs data. Shifting to the headlines. US unemployment fell in April to a 50-year low at 3.4%, signaling continued strength in the labor market. The Fed raised rates by 25 basis points to a 16-year high and signaled again that a pause could be imminent. Johnson & Johnson's consumer health unit Kenview made its debut on the public markets. We previewed that on last week's show. The stock surged 22% to value the company around $50 billion. That makes it the biggest US IPO in over a year. Apple posted its second straight quarter of declining revenue, but the stock still rose 4% on the company's strong iPhone sales, particularly in emerging markets like India.

Meanwhile, Apple's high-yield savings account, which we covered a few weeks ago, that brought in nearly $1 billion in deposits in its first four days. The launch day alone netted $400 million. Vice, the edgy media startup once valued at $5.7 billion, is headed for bankruptcy. The company is searching for a buyer willing to pay a fraction of that to avoid going out of business. Shares of edtech company Chegg were cut in half after the company said ChatGPT is starting to hurt its customer growth rate. Other companies in the sector also took a beating, with Pearson, 2U, and Duolingo down more than 10%. And finally, Hindenburg Research released its latest short-seller report on Icahn Enterprises. That's Carl Icahn's investment firm.

Shares of the company declined 20%. That's the largest one-day drop on record. And Hindenburg's report claims Icon Enterprises is overvalued by 75%. And it also questions the legitimacy of its 15.8% dividend yield. Scott, where shall we start? So let's be honest. These Hindenburg folks are total ballers. I mean, everyone, generally speaking, I advised a bunch of hedge funds in a previous life. Everyone was scared to death of Carl, as in Carl Icahn, because he's known as being very litigious, very angry, and well-resourced. He's not afraid to just try and

sue people into oblivion. So for them to target Icahn Enterprises is just a ballsy move. And the notion that a 16% dividend yield based on your trust that they were such great investors, that in itself feels strange. And I think, aren't they claiming that he's taking new investment money and pooling it and then using that, co-mingling those funds with what goes out to meet that 16% dividend, which is literally the equivalent of a Ponzi scheme as far as I understand it. Yeah. The ed tech stuff, essentially what we're going to have is if you read about AI, they say, okay, this will hurt paralegals, replace teachers, replace lawyers. So one by one, the market is going to find industries that are vulnerable.

I think they screwed up here. I think the Czech should have just said AI over and over and over in the earnings call and basically said how AI is going to make them a much better company. But this entire sector is getting taken to the woodshed. I also think we're going to find out that a lot of short sellers have millions and millions of bots. They load up on a short position, and then they start circulating these negative stories. I would argue it's even happening right now with some of the other regional banks that seem to be on more solid footing. But the media loves to find the next target. Vice should have died sooner.

You're young. Do you watch anything from Vice except for my show, which was a hugely underappreciated show? Yeah. What happened with that show did you get fired or did it just was it a dud what happened i'll tell you what happened so it was covid and they said we want to do a show with you and they did a show with me anon geared to us another thought leader so to speak smart guy great hair by the way they picked like three or four of us to do shows. And the first show that aired,

it was COVID. We did it out of my garage. Drew literally pulled a rabbit out of the hat. And I just hated everything about it. And then we screened it in my house, and my partner started crying about halfway through it. Like, what does this mean for us and our children? It was just so bad. She was literally worried about my career. Because it was so unhinged? It was like watching an old man have an epileptic seizure. They tried to make it really young and cool and flashing lights. It was just, it really was. It was awful. And the interesting thing that gives you insight into Hollywood is the guy who ran TV at the time for Vice called me and said, I've got great news. Your show's doing well. We want to order another eight or 12 episodes. And I said, no, I just want to get through the last two. And then I never want to speak to you again. And I never want to utter the word Vice unless it's me, you know, taking Molly and explaining why i take molly anyways that's neither here nor there and they were so shocked my agent called the production company called and then i went on to do bloomberg then

you know then cnn yeah you did two after that it might kind of been that awful right well i'm the covid 19 of tv networks i take weak tv networks and i put them on a ventilator and then i kill them so vice they should have known it was the beginning and the end when they had me do a show. But Vice has never, in my opinion, I've never understood how Vice makes money. I've just never understood how they spend all this money. And I never see it in the news.

I never see it as part of the cultural zeitgeist. They've been trying to sell this thing for parts for two years. So to me, it's not. The question isn't, why are they going out of business? The question is why it took so long. We predicted with Apple that this was going to be a winner. I'm shocked it's not more. A billion dollars is real, but I would bet by the end of 2024, if not sooner, maybe by the end of this year, they will be bigger than the majority of the regional banks that almost caused a banking crisis that have been in the news every day. Just want to talk about Chegg, which is it got cut in half because ChatGPT is threatening the business. The question that I would pose to you is it feels like that is a dramatic overpunishment

of the stock, considering that Chegg is actually planning on implementing GPT-4 to create its own AI product. I'm wondering if you would agree with that, and if you would agree with the notion that 50% reduction in the stock is far too low. The market is bipolar. The market is either manic about a stock and has an outsized, we can do no wrong, ignore the risks. The pendulum is never at the very bottom when it comes to a market's impression of the stock. So yeah, has it been overpunished? Yes. But does that mean it can't go down more? Because the communications and a narrative has momentum. And now the narrative around the ed tech space is that AI is going to cream it. And every media reporting cover education will look for evidence to validate that thesis. information bias, and anything that shows that people are using chat GPT to create their own curriculum or it's a great tutor is going to take these stocks down further and further. And also, online education, and I know this having started an online education company,

we got huge wind in our sales through COVID. Our revenues quadrupled in two quarters. And we knew that we had unfair advantage through COVID. What we didn't realize was how much the business would drop off post-COVID. And this has happened across the entire sector. People do not want to be in their homes staring at a screen learning statistics. So the market was looking for an excuse to take these companies down, and it got it with this acknowledgement that chat GPT might be damaging the whole ed tech sector. The more interesting question is what is the next sector that everyone will identify is the sector vulnerable to AI? Yeah. And then I just want to pivot finally to the Hindenburg report. In our last discussion

of a Hindenburg report, my first glance review was that the report didn't really have much to say. It was about Square and it was criticizing that people use Cash App to do illegal things and the reality is that there are things that are illegal in the world and people use money to get them done. This one feels different. I mean, this feels legitimate to me. The question to me is, as you point out, how is Carl Icahn going to respond? And do people, considering Carl Icahn's legendary status, do people trust him more or are they willing to buy Hindenburg at this point? Because Hindenburg appears to be making its own legacy name for itself. The stock's down 20% just because they released this report. As you were saying the other day, they can seriously move markets, which to me signals that Hindenburg may be becoming the next big legacy firm that can

really influence the way people think about finance. My vote for financial services or investor of the year is Hindenburg. It just strikes me that they have done, they bring such incredibly robust work, whether they're right or wrong, you could argue with, but they are moving markets. I think the most interesting thing, if I were the head of Hindenburg Research, one, I would be doing champagne and cocaine in St. Barts because I'd be much richer than I am. But the second thing I would do is I would say, all right, let's really test our skills here. Let's go find a company that's undervalued. Because they're trying to find asymmetry in the market. They're trying to find businesses that don't justify the valuation, which arguably should be the same or

at least some of the same skills you use to find a company whose valuation doesn't reflect the strength of the underlying cash flows in the business. So I think the way they kind of starts their hat wide, if they're even even interested because there's something about short selling where you sort of put on an air regulator and turn into the dark lord of you know the sith lord or whatever it is i'm trying to say you become darth vader the way they would become sort of the iconic if you will investor of this decade would be if they made a couple extraordinary long calls we'll be right back after the break with a look at the latest trouble in the banking sector. The Capital Ideas Podcast now features a series

hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea. Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Marketing is the last thing on your mind. But if customers don't know about you, the rest of it doesn't really matter. Luckily, there's Constant Contact. Constant Contact's award-winning marketing platform can help your businesses stand out,

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Get all the automation, integration, and reporting tools that get your marketing running seamlessly. All backed by Constant Contact's expert live customer support. Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca. We're back with ProfitGMarkets. It appears the banking turmoil is not as ring-fenced as we'd hoped. After JP Morgan took over First Republic last Monday to save it from failure, several other regional banks started to quake. Metropolitan Bank and First Horizon were down 50%, Western Alliance down 60%,

and PacWest shares fell as low as 70%, and the company said it was exploring a sale. They've all recovered slightly, and who knows what will happen by the time we air this. But my question to you, Scott, is what could we have done to prevent this? And what can we do now? My solution would be to dramatically increase the level of FDIC, the cap. Because what you might want to say is, all right, say you took the cap to $5 million. What would that mean? Probably 96% to 98% of all your depositors wouldn't feel the indigestion that you wake up with one morning or the fear that causes a run on the bank. Then

the question becomes, well, do you create moral hazard? Do you potentially set the FDIC up for massive bailouts? But they've been covering all the deposits anyways. So I wonder if you just don't solve this by massively increasing the cap, because right now there is no cap. They're paying out anyone. They're paying out at all. If the cap had been 5 million, the majority of VC-backed companies probably would have said, we're fine. We don't need to pull our funds. We don't have more than 5 million deposited here. You'd lose some big guys, but maybe the big guys should be at J.P. Morgan. Because if J.P. Morgan has a bank run, the FDIC is Janet Yellen and Chairman Powell who will just say to the bank, okay, the window is open. You can borrow as much money as you need from us to make sure

that everybody gets their money out, that anybody who tries to withdraw their money from J.P. Morgan, it's no problem. It's no problem. So effectively, what you have is a series of banks that have unlimited insurance that are backed by the full faith and credit of the U.S. government, the banks that have become too big to fail. And then you have regional banks, which are only going to be able to attract deposits of $250,000 or less. And the regional banks play an important role. They have niche products. They cater to a certain type. You can bet there's regional banks in Texas that are very good at addressing the specific needs of oil and gas companies. There might be an argument that these smaller banks

shouldn't be in existence, that the banking sector is too fragmented, that we need a smaller number of stronger banks. You could make that argument, but be clear, you're just going to see a massive inflow into the top eight or 10 banks by deposits from everyone else. And the downside of that, or one of the downsides of that, is that when you go to buy your first house, there's going to be fewer people bidding on that mortgage, and fees are going to go up slowly but surely across every product that banks offer. So the regulators have a decision to make, and that is the tension between having a more robust, diverse banking sector that is more competitive and offers people more specific differentiated service at lower fees, which is

the wonderful thing about a highly competitive market versus the risk of having a bunch of banks that might be subject to some sort of run because they're seen as more vulnerable. So the FDIC has said that covering uninsured depositors will deplete the deposit insurance fund by more than $19 billion. Now, the FDIC needs to refill that fund. And the way they'll do that is by taking fees from the biggest banks based on the size of their balance sheets and the number of depositors. Smaller banks will be off the hook, but they'll still need to make their regular quarterly contributions. So, Scott, there's a lot of debate over who really ends up paying for these bank failures, whether it's the banks or the depositors or the that your deposits are insured. And if we have a weak

banking system and they keep going out of business and keep having runs, then the cost to you is going to go up because the FDIC is going to have to charge richer and richer premiums. So there is some truth to the notion that premiums that depositors and the majority of taxpayers probably deposit money in a bank are going to have to pay higher and higher fees if we have a banking system where big banks consistently go out of business and the FDIC has to show up the same way that your insurance premium goes up in Florida when there's a lot of hurricanes and a lot of claims. The more claims, the higher the insurance premium. The question is, what is the lesser of the two evils? An increase in FDIC premiums that ultimately get passed through

to depositors, or the additional fees every depositor is going to have to pay, or every bank customer is going to have to pay, with a less robust, less competitive banking system. That's the fulcrum. That's the tension between the two that smarter people than me need to decide. Mia pointed out something interesting, which is that fintechs seem to have figured out a workaround for this FDIC insurance cap we're talking about. So SoFi, Mercury, and Crescent, all fintech companies,

they all launched deposit products this month that are insured beyond the $250,000 cap. In other words, you can deposit $2 million with SoFi, and they'll guarantee that all of that money is protected by the FDIC's backstop. Now the way they do that is by splitting your deposits into individual $250,000 sums, and then they spread those deposits across hundreds of FDIC-insured banks.

Now we wanted to find out how viable this idea actually is. So we spoke with Professor Sabrina Howell, Professor of Finance at the Stern School of Business. One of her focus areas is fintech. And as it turns out, she thinks emergent fintech companies could potentially fill the void left by regional banks if they continue to fall. I actually think they're one reason why I'm less worried about consolidation in the banking sector, because these new fintechs are offering consumers new options, high quality service at lower prices. Mercury, for example, is now the go-to bank for new startups.

If you set up a business, there's no button at Wells Fargo or JPMorgan Chase to open a business account when you have zero revenue and zero operating history. It used to be Silicon Valley Bank was sort of the only game in town, but increasingly it's Mercury and a number of other new players. And they are looking to provide all of these interesting new services, including spreading cash around to insured accounts. And I think there is this sort of growing role in providing new competition, not just in banking, but think about startups like Blue Vine providing small business loans, partnering with a charter bank that actually does the

origination as sort of like, it's almost like a utility company, bank as utility company, or you have big tech companies like Apple or Amazon providing consumers payments and banking services. And so I think there's actually a lot of really good reasons to encourage entry by these new players that are offering online financial services and that they can become, you know, the next iteration of what was the sort of smaller players, the regional banks, the smaller banks in the financial ecosystem. Professor Howe, with a better take, quite frankly, that is kind of one of the wonderful things about capitalism is all these new entrants see an opportunity to come in and innovate, specifically a product that does sort of a workaround or a hack regarding the $250,000

FDIC limit. I think it's a really interesting take. We'll be right back after the break to look at a new lawsuit involving Coinbase. Hey, it's Scott Galloway. And on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you?

And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts. What software do you use at work? The answer to that question is probably more complicated than you want it to be. The average US company deploys more than 100 apps, and ideas about the work we do can be radically changed by the tools we use to do it. So what is enterprise software anyway?

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accusing company executives and insiders of avoiding more than $1 billion in losses by dumping their shares weeks after the company went public. Between Coinbase's listing in April and mid-May, the nine defendants sold $3 billion worth of stock. That includes CEO Brian Armstrong, Mark Andreessen, and Union Square Ventures investor Fred Wilson. He sold $1.8 billion. Now, Scott, I put out a tweet about this last week showing the amount that was sold. And I called it one of the great robberies of the decade, because in my view, Coinbase is a fundamentally flawed company, which is why the stock is down nearly 90% from its listing. And this feels like a giant pump and dump. The tweet pretty quickly went viral. A lot of people supported it, but I also got a lot of criticism. And the critics said, this is how markets work. Investors had the right to

sell and they sold at the fair market price. Where do you stand on all this? I think it's important that you're finally getting some love on Twitter. And hate. Look, your tweet, the greatest robbery, one of the greatest robberies of this decade, you're learning. Twitter's definitely the medium for you because that's, let's be honest, that's a little bit hyperbolic. Look, the thing I think we're going to find out, especially about a lot of these firms, and in a direct listing, I don't think there's a lockup. There is no lockup. You can sell right away. You know, are we comfortable with people who know the company better than anyone else selling their entire stake? And they can do that. But should they be allowed to go on CNBC?

Should they be allowed to weaponize their millions of followers to talk about what a great company it is as they are hitting the eject button? And there are two characteristics about the fact that this was a direct listing, which you mentioned. And just to be clear, so a direct listing is when you sell existing shares, you don't need to issue new ones. So instead of getting a bank to underwrite it or go on a roadshow, as we talked about last week, you just list the shares directly. And as a result of that, there are no lockups. And a lockup is that period at which you're not allowed to sell as an insider but because this was a direct listing there were no lock ups so they could sell immediately so the other reason

that a direct listing is possible for coinbase is because it was a massive consumer facing company with so much retail interest and the only companies that have been able to go public via direct listing when they don't have those banks underwriting and selling the company to potential institutional investors are big consumer companies. Like the most recent ones have been Roblox and Spotify and Palantir. So to me, this was designed for retail, and that's reflected in the ownership of who owns Coinbase now. Almost half of it is owned by retail investors. It was also one of the most successful retail debuts in history. And then there's that second characteristic of it's designed for quick selling because

they didn't have those lockups. And the question is, is it right to be selling what I believe is a totally broken company? And there's a ton of evidence to support this. I mean, half of their revenue comes from fees from trading shit coins, like Dogecoin and Tether and Luna. All of them have basically proven to be just joke coins or Ponzi schemes. They're embroiled in legal suits. I mean, they're having this issue with the SEC

because they're listing cryptocurrencies, which are actually securities, which is illegal. The whole company is completely broken. Are we down for a system where it's possible and easy and okay for smart investors to sell broken shit stock to people who don't really know what they're doing? And that to me is the question here. It's not a question of legality. Maybe we could change the law. But if you believe that what they believed they were selling was a bag of shit, then to me, you got to take issue with this. And that's why I feel critical of it. But people said, oh, well, you know, this is how the markets work. Yeah. But you add, you're forgetting. These individuals,

as long as they can still wallpaper over this type of behavior with their very public investments and nonprofits, capitalism to a certain extent is your obligation is to leverage your own self interest to fix your own oxygen mask. But at some point you'd like to think, well, the market's failing. The market is not warning people. And so the question is, if you sell over a certain dollar amount, if you are promoting a stock through certain media channels, should you have a lockup period? Or if it crashes, say, more than 90%, should you, in fact, be subject to some sort of clawback? Because there is a group of individuals right now who are more in the hype business than the investment or the building business and these are the same people that if you go to their websites refer to themselves as builders no they're not they're fucking carnival barkers taking advantage of fomo taking advantage

of new platforms to again take unicorn feces and fling them at unwitting tourists to the unicorn zoo. that VCs invest in the private markets, and then once the company goes into the public markets, they have to diversify, because VCs don't invest in public stocks. That is how VC works. That's how the whole system works. So what should they have done then? What should Fred Wilson and Union Square Ventures have done? Say they're holding this thing that they know, let's assume they know that it's kind of a

shitty company and that $381 a share is too much. But what else are you supposed to do, I think, is the argument that they would make. And I kind of don't really know what to say to that. It's a solid argument. Their obligation is to their limited partners and to their own families. You have no friends on Wall Street. There's someone on the other side of the trade that thinks they are going to end up better than you. That's the basis of markets. The question is, should regulators move in given there are new platforms, new kind of abilities to dump new platforms such that they can create hysteria not based on any underlying fundamentals, and also new mechanisms of taking a company public, such they can sell with absolutely no friction. Whether it requires regulatory intervention, I don't know. That's for DC to decide.

But things feel like they've gotten really out of control, where the pumping and dumping has gone parabolic. Miami hosted its second Formula One Grand Prix this past weekend, bringing celebrities, fans, and hundreds of millions of dollars to the city. Three-day passes ran from $880 to $5,000, making it the second most expensive race all year. But that was merely the cost to see the race itself. Off the track, there were tequila and caviar tastings, private clubhouses, garage tours, driver meet and greets, sleepovers on the Mercedes team yacht, and even tables at clubs like Eleven, which went for as much as $200,000. All told, the economic impact should be even higher than last year, when Miami's first ever Grand Prix netted $350 million in new spending for the city. So, Scott, you actually went to the Miami race last year. Can you tell us what that was like? It's fabulous. I used to get

a Formula One in Montreal every year. It's a great city. I love this. I love Formula One because it's more about an experience. It's more about going to a city for the weekend. It's got a fabulous crowd. It feels very elegant. If NASCAR is Android, Formula One is iOS. They've done an amazing job marketing it and getting celebrities and getting shows on Netflix about it. It's a brilliantly run company. Greg Maffei has done an amazing job with it. Specifically, Formula One Grand Prix Miami is where I caught

COVID. I went to a pop-up party hosted by Carbone, a fabulous restaurant, and Wyclef, John, is that his name? Wyclef was playing there, and there was 700 people crowded in a space, ridiculously hot people in a tent with no ventilation in the midst of COVID. And I literally thought to myself, I had two thoughts. The first is I'm getting COVID tonight. And the second is it's worth it. That's how good a party it was. So look, Formula One's bringing together a lot of attributes around leveraging new medium platforms for cross-promotion, celebrities, and experience that breaches beyond the three or four hours that you're at the event. The event itself, I find incredibly boring. Here he comes, there he goes. It's just, I don't find it an interesting spectator sport. You're

there to see the people, you're there to do a tequila tasting or whatever it is you do at Formula One, but it's an example of, it's not about the event, it's about the culture and the vibe and the experience, but they've done an amazing job. Liberty Media has tripled the value of F1. U.S. viewership has doubled since their acquisition, I think mostly through that Netflix program, which is supposed to be great. This could be, I mean, the interesting second to a knock-on-order effect is you could see Netflix develop a new revenue stream by going to sports teams and saying, pay us $100 million and we'll do two seasons of what it means to play for the San Diego Chargers or a league. Or we're going to take the professional lacrosse league, the PLL, to the next level by doing an entire – we'll commit to three seasons of green lighting a series and we want $50 or $100 million.

And I think they would pay it what's also they've done a great job as they're bringing in younger fans the average age of a formula one fan dropped from 36 in 2017 to 32 in 2021 which is a huge drop and also you've seen an incredible growth in team valuations mercedes paid 176 million for the team in 2010 and it's now worth $1.5 billion, which is just incredible. You're going to see teams increase in value because as long as they keep creating men in midlife crises, as long as the 0.01% continues to aggregate more and more income, you're going to lose money every year, whether it's the Washington Commanders or the Mercedes team. And then in 5, 10, 20 years, they'll sell at extraordinary multiples of what they were purchased at. And then if you just look at the sponsorship deals, we've got like $100 million per year deal between Oracle and Red Bull. Patronus is paying Mercedes $75 million a year.

I mean, is this becoming the new premier advertising space, the sort of the international rich people's Super Bowl? Yeah. And this is my prediction. And then I got to hop because I literally have all these Brits showing up to eat Mexican food and my dog's going crazy. A little insight into the dog. But my prediction is the following. What Ryan Reynolds did at Rexham, what F1 is doing with Netflix, you're going to start to see that everywhere. You're going to start to see big media companies, celebrities, and streaming companies come together to build. It'll be Tom Cruise plus Disney plus by the Anaheim Ducks or whatever it is, or by a league. And you're going to see a medium-sized league. So much money is

coming into leagues because the bottom line is there's very few events that leverage the emotion, the income inequality, the emotional tribalism of the human species, the ability to find a new revenue stream for media companies and recognize that kind of increase in shareholder value. We're about to see Rexum or what's happened at Rexum times 10 across leagues all over the world,

including a professor with erectile dysfunction who is the new owner of Rangers, one of the strongest brands to come out of Scotland since Pringle and some famous Scotch brand. Anyways, I'm off to Cinco de Mayo. El grande perro Cinco de Mayo. Ed, have a fantastic week. This episode is produced by Claire Miller and engineered by Benjamin Spencer. Jason Stavers is our executive producer.

Mia Silvera is our research lead. And Drew Burrows is our technical director. If you like what you heard, please follow, download, subscribe, and check us out on YouTube. Thanks for listening to Prop G Markets from the Vox Media Podcast Network. Join us Wednesday for office hours, and we'll be back with a fresh take on markets every Monday. Hello, I'm Esther Perel, psychotherapist and host of the podcast, Where Should We Begin? Which delves into the multiple layers of relationships, mostly romantic. But in this special series, I focus on our relationships with our colleagues, business partners, and managers.

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