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2:27

So Kim, we are in the middle

2:29

of climate week, UN week, whatever

2:31

you want to call it, the week when

2:33

all traffic grinds through a

2:35

hole. You have been commuting to

2:38

Bloomberg headquarters in Midtown, the epicenter

2:40

of all the crazy, in

2:43

your Nike's which you have been using

2:45

to hurdle over police barricades to get

2:47

to work. Is that right? Oh

2:49

yeah. You really got to fight to

2:52

get to work these days. We're just

2:54

like a few blocks away from that.

2:56

They shut down a whole street and

2:58

then the motorcades go through. No. So

3:00

this is all apropos of given that

3:03

everyone in Midtown is walking these days

3:05

because it's the only way you can

3:07

get around. One of

3:10

the things that one might notice if one

3:12

was a fashion industry

3:14

person, is that the

3:16

brands on the shoes that the folks are

3:18

wearing are now much more

3:20

diverse than they used to be. Everyone used

3:22

to just wear like Nike's or Reeboks or

3:24

something. And now you've got the hookers and

3:27

you've got the ons and you've got all

3:29

manner of other brands. And the

3:32

one brand that you're seeing much

3:34

less of these days is the

3:36

Nike's. And you just

3:38

wrote this massive article just before the

3:40

CEO stepped down saying he just made

3:42

Nike uncool. And that is why no

3:45

one is wearing Nike's. Is that basically

3:47

it? Our story went up

3:49

on September 13th and then six days

3:51

later, the Nike CEO

3:53

John Donahoe, who had been

3:55

there for over four years,

3:58

got pushed out and. replaced by a

4:00

long time executive who was actually coming

4:03

out of retirement. So from

4:05

four years of retirement, he's coming

4:07

back against Elliott Hill, he's going

4:10

to be the new CEO of

4:12

Nike. And what this former CEO,

4:14

Donahoe, did was essentially the first

4:17

two or three years, about two

4:19

years-ish after he started,

4:21

Nike grew immensely, right? They

4:23

were trying to hit this

4:25

$50 billion revenue

4:28

target from somewhere in the 30s. And

4:31

he successfully did that. How

4:33

did that happen? It was these lifestyle shoots,

4:35

right? So Nike's known for all these performance

4:38

footwear models in

4:40

running, basketball, virtually every sport,

4:42

right? But he went

4:45

toward these shoes that were

4:47

made decades ago, like

4:49

Dunks, Jordan 1s. Those

4:52

are the OG Jordans that he first wore

4:54

in 1985. He said, like, retro

4:56

models of shoes that one would never wear on

4:58

a basketball court now and have

5:00

become more lifestyle shoes that you'd wear on

5:03

the sidewalk and the street. And the other one

5:05

are Air Force Ones. Again, old basketball shoes, no

5:07

longer performance. Sales of those

5:09

really blew up. But eventually,

5:12

once those shoes got too popular, they

5:15

lost a little bit of their cool. If you see everyone

5:17

else wearing exactly what you're wearing, you're not going to want

5:19

to keep wearing that. And over

5:21

the last year, year and a half,

5:23

sales of those have really cooled off.

5:26

And Nike didn't have a whole lot to replace

5:29

those shoes. Donahoe did a few other

5:31

things, right, Kim? One thing I thought

5:33

he did that now, in hindsight, looks like a

5:35

clear mistake was he ended

5:37

some of

5:40

Nike's retail partnerships with companies like Footlocker.

5:44

And he basically Nike

5:46

lost retail space in all these

5:48

stores. And that gave this,

5:50

like, great opening for all these sort of

5:52

new brands like Hoka and On to take

5:54

advantage of the opportunity and move in. And

5:57

like, you can really see just

6:00

Felix was talking about UN week

6:02

or whatever, but where I am

6:04

up in Westchester, I'm doing these

6:06

5Ks recently, and there's not a

6:08

runner wearing Nike's anywhere to be

6:10

found. It's all Hoka and On

6:13

and some other brands, I don't even know what

6:15

they are anymore. But it was interesting

6:17

to me, because you think of in 2024

6:20

that retail doesn't matter that much, but in

6:22

actuality, and I think Don Home might

6:25

have learned, it's really important. Yeah,

6:28

some is being really kind here. It was more than

6:30

50%. So more than half

6:33

of the retailers that Nike worked with

6:36

actually got either cut entirely,

6:38

or they had a reduced amount

6:41

of inventory coming in from Nike.

6:43

And the most prominent examples are

6:46

Amazon, Zappos, Dillard,

6:50

DSW, Urban Outfitters. They used to

6:52

sell Nike's and they didn't all

6:54

of a sudden. But Nike's closest

6:57

partner is Footlocker. Footlocker had 75%

6:59

of its purchases were Nike products.

7:05

That decreased to 65% and then

7:08

all the way down below 60% over

7:12

those three years as Nike pulled

7:14

back from them. And at the time,

7:16

the Footlocker CEO was like, what am I supposed to

7:18

do? So he went out to

7:20

the other vendors and said, okay, we

7:22

need to fill all the space. Where are we

7:24

going to go? And this is happening at not

7:26

just Footlocker, but all of these

7:29

retailers suddenly have this open shelf space and

7:31

who are you going to give it to all

7:33

of Nike's competitors, right? And we are just starting to

7:35

go back to stores in 2021. And that just ramps

7:37

up in 22 and 23. So if you go into,

7:42

in our story, we walk into a

7:44

Fleet Feet in, that is an upscale

7:47

running store in Nike's hometown of

7:49

Portland. And you walk into

7:52

the Fleet Feet and you see this wall

7:54

of shoes, right? You know, the shoe wall.

7:56

It's all the running shoe brands that one

7:58

would expect. You go through them, you're like,

8:01

okay, there's the ons, there's the hokas, and

8:03

so on. And you ask

8:06

the sales associate, do you have

8:08

any Nike? And they're like, not right now. Let

8:11

me ask you about the big picture here about

8:14

the thinking. Because

8:16

I'm old. You're a cool person who's

8:18

much younger than me. I'm an old person who

8:20

thinks that it's normally a good idea to try

8:22

on a pair of shoes before you buy them.

8:26

It seems to me that Nike, with

8:28

its direct to consumer model,

8:32

it was like, no, we want you to just basically

8:35

order them on our website. We will

8:37

have what they call doors. They have

8:39

these various different retail concepts that Nike

8:42

owned and operated a bit like the sort of

8:44

Apple stores, where they will

8:46

sell you shoes if you ask them

8:48

nicely. But they feel more like brand

8:50

advertisements than actual shoe stores most of

8:52

the time. There aren't nearly

8:54

enough of them to go around. There are

8:56

many, many fewer Nike owned

8:59

stores than there are for lockers

9:01

or shoe stores generally. And

9:03

it seems to me that Donohoe's big

9:05

bet was people are going to really

9:08

want Nike's. They're going to want specific

9:10

shoes. And so either they're going to make

9:12

the effort to seek out the Nike store and go to the

9:14

Nike store and buy the shoe there, or they're

9:16

just going to go to the Nike website and

9:18

buy it online because they know what size they

9:20

are in Nike's. And people don't

9:23

need retail anymore. Was that the bet? And is

9:25

that the thing that he got wrong? Here's

9:28

the thing. It worked for like a really

9:30

long time. So the first,

9:32

let's say 2021, 22, that is

9:34

when hype sneaker culture

9:37

really peaked. So Nike

9:39

was dropping shoes on its app, limited edition shoes

9:42

that you would go up and then either

9:44

take a dub or an L on. And most

9:46

people would get L's because they would try to

9:49

buy this shoe. It would be sold out in

9:51

zero seconds because the bots are buying it and

9:53

all these resellers are trying to go on to

9:55

StockX and Goat and whatever to make

9:57

a profit off these shoes. These are

9:59

speculated. investors, whatever. And then you just

10:03

keep releasing those shoes over and over and

10:05

over again in different colors and in different

10:07

limited batches. So for those

10:09

two years, Nike's sales shot up like

10:11

25%. People were buying

10:14

shoes that way. Eventually, hype

10:16

culture kind of slowed down.

10:18

And the lifestyle shoes that

10:20

they were buying, those dunks, those Air

10:22

Force Ones, those Air Jordans, it

10:25

all cooled off. And what's critical

10:27

here is that back at Nike

10:29

headquarters in Beaverton, they had slowed

10:32

down the pace of

10:35

product development. Meaning they had the pandemic, it's

10:37

a big crisis, you got to handle supply

10:39

chain stuff, and you have to figure

10:41

out what you're doing with these retailers that

10:43

you're culling. There's all these other things going

10:45

on, and there was just not enough coming

10:48

out of Beaverton.

10:51

New running shoes, new basketball

10:53

shoes, just new kinds of

10:56

shoe manufacturing technology like you used to

10:58

see from the previous CEO who's a

11:00

real product guy. Mark Parker was the

11:02

CEO for more than a decade. He

11:05

was like, Phil Knight, the founder's guy,

11:07

lifer, former sneaker designer,

11:09

really a product guy. John Donahoe,

11:12

the previous CEO now, was

11:14

brought in to explicitly

11:17

brought in to shore

11:19

up those e-commerce operations. The decision

11:21

to go away from retailers and

11:24

onto Nike's website and its own

11:26

stores, the direct to consumer thing

11:29

had already been ongoing

11:31

before he got there. That was a

11:33

board decision, and Donahoe was hired by

11:35

the board to execute on that strategy,

11:38

and he did. And so

11:40

it seems a little bit unfair

11:43

to blame him from doing what he

11:45

was hired to do. But then the

11:47

second bit you're saying, which clearly was

11:49

his fault, was the under investment new

11:52

product. And I'm wondering whether

11:54

that was actually the problem,

11:56

because I was around in

11:58

2020. in

12:00

2022 when speculative

12:02

fervor was raging not just in

12:05

sneakers, but in anything you could

12:07

mention in crypto, in meme stocks,

12:10

in watches. I mean, you

12:12

should see what happened to the price

12:14

of Rolexes during those years. And so

12:16

a whole bunch of relatively young

12:18

people with a bunch of stimulus checks in

12:20

their pockets were like, I can

12:23

play this fun game of making money

12:25

by buying and selling and flipping and

12:27

trading these assets. And you can

12:29

do that very easily on StockX. And

12:33

so that created this sort of

12:35

artificial demand for shoes

12:37

from people who are never going to

12:39

wear them, but who just wanted to

12:42

treat them as assets and collectibles. When

12:44

that demand inevitably ended, as

12:47

it did when basically when the Fed started

12:49

raising interest rates in 2022, you

12:51

know, people just didn't want collectible

12:54

shoes anymore. The speculative

12:57

bid for Nike's went

12:59

away. And then like at

13:01

that point, it doesn't matter whether

13:03

you have like a sexy

13:05

new basketball shoe that is incredibly high tech that

13:08

allows you to play basketball better, because that wasn't

13:10

why they were buying the shoes in the first

13:12

place. They weren't buying the shoes because they wanted

13:14

to play basketball better or run faster or do

13:17

anything athletic or even wear the shoes at all.

13:19

They were just buying them as

13:21

speculative vehicles. And when

13:24

that goes away, then something athletic

13:26

that makes you athlete in a better

13:29

way is not going to

13:31

fill that gap. Well, it seems like

13:33

these are two wildly different markets, which is why it

13:35

doesn't totally make sense to me that they would abolish

13:38

some of these retail partnerships. So for example,

13:41

the story you mentioned Fleet Feet, which is

13:43

a running chain, if you

13:45

were buying shoes there, you're buying like

13:47

a good technical running shoe. And

13:49

so it's not the same customer who's going

13:51

into the app looking for the obscure drop

13:53

that was co-designed by Virgil Ablue or whatever.

13:56

Why did the company think that this had to

13:58

be an either or proposition? Some

14:00

parts of this have to do with

14:02

Nike wanted to just feel more exclusive,

14:05

I think. And if you look at some

14:07

of the... In the story, we talk about

14:09

this store in Portland called the

14:11

Dark Side Initiative. And it's just

14:13

like really industrial chic store. You

14:15

go inside, there's only like a

14:17

few items there. Like it's not

14:20

cluttered, it's very sleek. And

14:22

it's a so-called... The sneaker

14:24

people call this a tier zero

14:26

store, in that it gets the

14:28

very, very hottest releases that... Like

14:30

the most exclusive things like only

14:32

sold in a few stores, 500

14:34

of the shoes exist in the world. Those

14:37

kinds of Nike products.

14:40

And those are really valuable for Nike

14:42

as far as culture, right? It's not

14:44

just these big chain stores that are

14:47

important, that keep Nike relevant to the

14:49

people who care most about sneakers. It's

14:51

not even just the highest end stores

14:53

like that. They cut off a lot

14:56

of just mom and pop sneaker

14:58

shops all over the world, who just

15:00

wanted to sell some Nikes as part

15:02

of their... It's like the

15:05

ground game had been lost for this

15:07

brand, because it pulled too

15:10

far away from those shoppers. So

15:12

Kim, who is playing

15:14

the hype beast game

15:16

well these days? Because I don't think

15:19

that Hoka and Anna doing limited edition

15:21

drops that everyone is trying to resell.

15:23

All the dads are lining up for

15:25

Hoka's. The

15:28

new balances in Hoka's. I

15:31

feel like you have to find somewhere in

15:34

between, right? You can't be all hype and you

15:36

can't be all performance. Sneakers

15:38

are performances by nature. I

15:41

guess what I'm asking is just, is anybody hype these days?

15:44

Because we've lost Kanye, right?

15:46

He's not hype anymore. There's

15:48

still sneaker conventions. Oh

15:50

man, Kanye, yeah. There's

15:52

still sneaker conventions and everything. I

15:54

think people are doing this less

15:56

often, like professionally, because especially

15:59

during that period. time a lot of people

16:01

were doing this like full time. We're just

16:03

flipping sneakers all day, every day.

16:05

And that culture still certainly exists. StockX is

16:07

still there. Goat exists, stadium goods, flight club,

16:10

all these things. Yeah, you know, I understand

16:12

that the resellers are

16:14

there, but who are the manufacturers who are

16:16

feeding it? I feel like apart from like

16:18

Valencia, Argo and like these weird high-end fashion

16:20

brands, like the sneaker companies have

16:23

like somehow lost that market in general, not

16:25

just Nike, but all of them. To piggyback

16:27

on Felix's question, I was wondering before we

16:29

sat down to talk, like what is the

16:32

cool sneaker now? Like the cool mainstream sneaker,

16:34

like the Panda dunks, I guess were cool.

16:37

Obviously, Jordan's cool, but like what

16:39

is the new cool sneaker?

16:42

Solomon's are pretty cool. Solomon's, writing

16:44

it. Kind of out of nowhere,

16:46

dude. I went to a StockX

16:48

event that they were hosting with

16:50

all these very, very

16:53

sneakery sneaker people. And

16:55

like 10% of them are wearing

16:57

Solomon's. Whoa, okay. That is fascinating. You

16:59

heard it here. Don't you think that's

17:01

because like snowboarding and skiing are kind

17:03

of inherently cool? Like they're just not

17:06

nerdy sports? So

17:08

it's basketball. Like you gravitate toward

17:10

the less nerdy sports. I mean,

17:13

skateboarding shoes are a whole thing,

17:15

you know, vans and classic. These

17:17

are whole brands that exist out

17:19

of one sport. And obviously, they've

17:22

moved beyond that since their inception.

17:25

But a lot of the brands

17:27

are originally running shoes,

17:29

right? So Nike was a running

17:31

shoe company once upon a time.

17:33

New Balance running shoe company. You

17:36

are seeing New Balance, for example,

17:39

is getting into some of this hype stuff. And

17:41

they've done a really good job with collaborations over

17:43

the past several years. And you're

17:45

just seeing more and more of that coming

17:47

out of them. But they're also still known

17:49

as, you know, they're also a dad shoe.

17:51

They're also a performance running. There's no more

17:53

dad shoe. Yeah.

17:56

The dad shoes are just cool now. So there you go. In

17:59

the piece you describe how John Donahoe

18:01

got the job of Nike CEO. And

18:03

it's like, basically he

18:05

was friends with all the right people. He

18:07

had worked at Bain Consulting. He was the

18:10

CEO of Bain, yes. He was the CEO

18:12

of Bain. He knew Tim Cook. Tim Cook

18:14

is on Nike's board. He knew Phil Knight

18:16

because I don't know how they knew each

18:18

other, but just like rich guy friends. No,

18:20

it's the job, Emily, of a consultant to

18:22

be friends with the CEO. Like if you're

18:24

not friends with the CEO, you are a

18:27

bad consultant. What are you doing? Okay. So

18:29

he got the job basically because he just

18:31

was friends with all these other men.

18:33

And they were like, yeah,

18:35

he's a good guy. He was the

18:37

eBay CEO. He understands the internet, which

18:40

is kind of wild to contemplate because

18:42

eBay. But my question is, was there

18:44

any kind of like CEO

18:46

job hunt at Nike, or was it just

18:48

a matter of like, let's just hire this

18:50

guy? Because that to me is kind of

18:52

wild. Like you have this very important brand

18:54

and company, you don't do a real CEO

18:57

job search. Like how common is

19:00

that actually? I mean, I feel

19:02

like Nike has never done a real CEO

19:04

job search. Like the latest one, they just

19:06

like, we're like, oh shit, we'll just bring

19:08

in Elliot because we know him. He's a

19:10

good guy. Yeah. Well, that

19:12

also worked for them for a while though.

19:14

The guy, the design guy, Mark Parker, his

19:17

tenure was pretty successful. And so they

19:19

have a track record of being able

19:22

to promote people internally. But if

19:24

you're going to bring in an outsider like Donahoe

19:26

was, you would think they would be like, let's

19:28

look around. Plus the fact that the guy before

19:30

Donahoe was kind of ousted, he wasn't Me Too

19:33

specifically, but the company was kind of, as Kim

19:35

explains in the piece, like the company was going

19:37

through a kind of like culture thing. People

19:40

were saying like it was kind of a

19:42

boys club, et cetera. The complaint was it

19:44

was a boys club. So what did they

19:47

do? One guy resigns and then another guy

19:49

is hired who is literally from, not literally,

19:51

almost literally from another boys club. It's just,

19:53

it's kind of wild to me. It's a

19:56

really good point and it's totally well taken.

19:58

I would say that he would. is the most

20:01

insidery outsider you could imagine. He had

20:03

spent a lot of time in Beaverton,

20:06

in the executive suites. He knew the ropes.

20:08

It wasn't like he was coming in with

20:10

no sort of institutional knowledge of how Nike

20:12

worked. No, he was like on the periphery

20:14

and they're like, that guy, he's always been

20:16

around, we like him. The

20:18

backstory here is, it is really interesting, right?

20:20

So he met Phil Knight, John

20:23

Donahoe, the former CEO, met Phil Knight while

20:26

he was CEO of Bain and Phil

20:28

was CEO of Nike. And

20:30

they hit it off during those years, this

20:34

is 25 years ago or so, and

20:36

he became an advisor

20:39

to Phil Knight and Bain

20:41

had consultants at Nike ever

20:43

since. And zoom

20:46

forward to the decision to

20:48

make Donahoe CEO. During

20:51

his time at eBay, he was friends

20:54

with a whole bunch of Silicon

20:56

Valley, right? And one of those people was

20:58

Apple CEO, Tim Cook. Tim Cook's been on

21:00

the board of Nike since 2005, I believe.

21:05

And it just, they became

21:07

part of the crew, you're

21:09

right. Like at the top of

21:11

Nike. So when the

21:13

time comes to select that CEO, he's only the

21:16

fourth Nike CEO in history. It's Phil Knight. They

21:18

had a very short term, just over

21:21

one year CEO outsider a long time

21:23

ago. And then Mark Parker had been

21:25

running this company for a very long

21:27

time and really like made Nike into

21:29

the global sort of powerhouse that it

21:31

is today. So

21:34

that's not a lot of decisions to be made. We

21:37

should also mention just in terms of

21:39

Tim Cook being on the board, that's

21:41

wild. Like Tim Cook, like the 2024

21:44

version of Tim Cook would never join

21:46

a board. Like he's way too important,

21:48

way too big, way too rich. But

21:50

like Nike managed to get him

21:52

long enough ago that like he said, oh

21:54

yeah, Nike, that sounds cool. So we should

21:56

do that. Aw! So

22:09

before we get to the break, I want

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to tell you about our Slate Plus bonus

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as of May 2024. Full disclosures in the

24:26

podcast description. I

24:31

want to segue from Nike

24:33

into like powerful brands more

24:36

generally. We've talked a bunch

24:38

already about like the

24:40

power of a brand and how like if

24:42

you get something right, then suddenly if you're

24:44

Salomon, you can start getting

24:46

all of the cool kids to buy

24:48

your shoes. For that matter, if

24:50

you're Balenciaga, just because you have the power of the brand,

24:52

you start putting out the ugliest sneakers

24:55

of all time. And everyone's like, oh my God, those are

24:57

so cool. And everyone starts, you know, covering them and buying

25:00

them at astonishing prices. Brands

25:02

are amazing things. And you've also written, and

25:04

I love this, I have to

25:06

say, we don't have favorites here on Slate

25:08

Money, but we do. I love

25:11

this story even more than your Nike

25:13

story. This great piece that you wrote

25:15

about Authentic Brands Group, which is just

25:17

this repository of a million brands you've

25:20

heard of that have brand power that

25:22

used to be companies, that

25:24

the companies failed, the brand

25:27

remains. And I need to

25:29

tell this story. I went on a

25:31

little sort of like long weekend road

25:33

trip last week to Philadelphia in DC,

25:36

and I discovered that I had forgotten

25:38

to pack any socks. And

25:40

so I needed to buy a pair of socks. And

25:43

so I popped into the local, I

25:45

think it was called a Bloomingdale's outlet, which

25:47

was the closest store selling socks to my

25:49

hotel in Philadelphia, and tried

25:51

to find some socks. And there was

25:53

some socks with the Brooks Brothers brand

25:55

on them. I said, okay, these

25:57

ones have a slightly higher cotton content than the other ones.

26:00

other ones, so I'll buy these. And I

26:02

wore the socks and I will never wear them again. They

26:04

were terrible. But I bought them in large part and they

26:06

actually were in Bloomingdale's in

26:08

large part because they said Brooks

26:10

Brothers on them. But it's not actually Brooks

26:13

Brothers in any kind of real sense. It's

26:15

like the zombie reconstituted

26:17

Brooks Brothers that was then

26:20

built up from nothing but the

26:22

brand by Authentic Brands

26:24

Group. And Authentic Brands Group has

26:27

dozens or hundreds of these brands. It's amazing

26:29

the list of them that you list in

26:32

your piece. Yeah,

26:34

let's just ring some off so people

26:36

know. It's Eddie Bauer, Forever 21,

26:39

Barney's New York, Two Stikatour, Nine One,

26:41

Barney's, they own Barney's as well. Yeah,

26:44

it's Vince Camuto, Nanaika, Isod,

26:48

and he owns a chunk of JC

26:50

Penney. It's nuts, right? Basically, years ago,

26:52

he started, the idea was,

26:54

the origin of Authentic Brands,

26:57

was that back

26:59

in the day, there was no, people

27:02

weren't putting a value on

27:04

a bankrupt brand. So when a

27:06

company went under, that liquidation firm

27:08

would bid on it, buy

27:10

it for parts, and then sell all the

27:12

parts, and you

27:14

flip them and you make a profit off of

27:17

that. The brands themselves

27:19

would just disappear. So

27:23

what Jamie Salter at Authentic did

27:25

was put a value on those

27:27

brands. And by buying the

27:29

brand, and not the rest of the

27:32

stuff that the liquidation firm still want

27:34

to flip somewhere else, by

27:36

buying those brands and then licensing them,

27:38

you don't take on all the things

27:40

that killed the brand, all the debt,

27:43

all the leases, all the whatever else

27:46

that made this brand go under. And

27:48

then if you can use that

27:51

low overhead model to cheaply

27:54

run these now

27:56

zombie brands, then you have something there.

27:59

So to just Just to be clear here, the socks

28:01

that I bought were not made by Brooks

28:03

Brothers in any real sense. They

28:06

were made by some company that

28:08

no one's ever heard of that

28:10

has licensed the Brooks Brothers brand

28:13

from Jamie Sulte, an authentic brands

28:15

group. And

28:17

because they have licensed the brand, they're able

28:19

to get those socks into Bloomingdale's in a

28:21

way that they probably wouldn't be able to

28:24

otherwise. Correct. That

28:26

is right. But I mean, keep

28:28

in mind, no apparel company really makes its own clothes

28:31

anyway. These are all things made

28:33

in factories by someone

28:36

else. But the point is that ABG

28:38

doesn't really run the risk of

28:41

those socks not selling very well. They

28:43

just get the license revenue. Yeah, they get a royalty. There

28:46

are some risks, as Kim reports

28:48

in his story. When they give up

28:50

their own model, as they did with

28:52

Forever 21, and try and actually operate

28:55

the brands as many

28:58

companies as subsidiaries, then things can go

29:00

wrong. Right. What

29:02

happened with Forever 21, Kim? So Forever

29:04

21 is a really interesting case because

29:06

Jamie Sulte has been trying to take

29:09

bigger risks on bigger

29:11

brands and use new types of

29:13

models to grow authentic.

29:17

And with Forever 21, it was embattled for years. It

29:21

was owned by this really dysfunctional Korean

29:23

American billionaire couple, and they were losing

29:25

tons of money. And

29:27

eventually, they were ready to

29:30

accept 80 million for Forever

29:32

21. But

29:34

this time, what Sulte did

29:36

was actually invest in the

29:39

stores. Usually with

29:41

this model, you stay away from the real estate. You don't want

29:43

that headache. You don't want to deal with the leases. You don't

29:45

want to deal with the mall chains and everything. But

29:48

this time, they did. So they started an entity

29:50

called Spark Group, which

29:53

was owned with the

29:55

largest smaller operator in the US.

29:58

That's Simon property. group.

30:00

So Simon wins

30:02

because Forever 21 is

30:04

still alive and still

30:07

operates in so many of its malls,

30:09

hundreds of its fleet, right? And then

30:12

Authentic can own the brand and

30:15

make money off of that. So this is just,

30:18

it was a novel and new concept that they

30:20

hadn't tried before. And it did not work. I

30:24

mean, yeah. You know, like

30:26

this is what business is. You try new things.

30:29

Sometimes sometimes they work, sometimes they don't work. But

30:31

it didn't work not because it's necessarily because of

30:33

that model, but because of the

30:35

other things one has to deal with when

30:37

you're actually operating a business like this, right?

30:39

That's competition. Like there's Chinese brands that do

30:41

it better than Forever 21. Basically the reason

30:43

it didn't work was not that Forever 21

30:45

was hard to operate.

30:48

It was just that Xian and Tiemu came along and

30:50

then Xian and Tiemu just killed it. Yeah. I mean,

30:52

Xian essentially does what Forever 21 does, but 10 times

30:56

better and 10 times faster, right? You can't

30:58

stay Forever 21. Do you know what I

31:00

mean? We all knew it. You can't stay

31:02

Forever 21. It was right there

31:04

all along. What

31:07

was, you know, interesting to me about the stories that there

31:09

are other companies that sort of do

31:11

this, but Authentic has become the big

31:13

player and partly because Salter's is kind

31:15

of larger than life figure who in

31:18

his own words he says when Jamie Salter

31:20

wants to buy something, Jamie Salter gets what

31:22

he wants, which I always love

31:24

it when people talk about themselves in the third person.

31:26

It's just such a, you know,

31:28

look into their psyche. But,

31:30

you know, he sort of he ended up buying

31:33

Reebok while he was at a Formula One race

31:35

and just decided he saw the other CEO there

31:37

and was like, I'm going to buy that. And

31:40

so it seems like a lot of his purchases

31:42

are really driven by his intuitive sense

31:44

that, you know, the IP around the

31:46

brand is worth something just because it's

31:49

not dead yet. And he

31:51

wants to be in sports and entertainment like that is

31:54

the next step for him. He bought

31:56

Sports Sports Illustrated. Yeah, he spent like

31:58

a quarter of a billion dollars. on

32:00

David Beckham. It's like, come on, there's no

32:02

way that David Beckham is worth

32:05

a quarter of a billion dollars. Now,

32:07

David Beckham, so his two big business

32:09

partners on the celebrity side are David

32:11

Beckham and Shaquille O'Neal. And

32:13

they're friends, they hang out. I

32:15

was with them on a terrace

32:17

in Las Vegas during the Formula One

32:19

race. The venue was called Club

32:21

SI. It's a sports

32:23

illustrated club. They do these parties and

32:26

events all over the world now as

32:28

part of the new SI model, right?

32:31

And, you know, they were all there having fun.

32:34

It's yeah, he wants to

32:37

be cast in that in that manner,

32:39

like within the sports and entertainment areas

32:41

as as that larger than life personality

32:43

with these really cool friends. Okay, so

32:45

Kim, let me let me run this

32:47

hypothesis by you since you know the

32:49

guy that he this is

32:52

a billionaire who made a

32:54

lot of money doing

32:57

relatively bottom feedery things around

32:59

brand IP. And then

33:02

he made so much money that he never needs to worry

33:04

about money ever again for the rest of his life. He's

33:07

post economic. He's post economic to use Matt

33:09

Mullenweg's term. But yeah, so he is at

33:11

this point, solidly in

33:13

the world of billionaire whimsy. And

33:15

it's not a public company. He doesn't he's not

33:17

answerable to shareholders. He's not answerable to a board.

33:20

And he's he like wanders around going, I want to be

33:22

friends with David Beckham, I want to buy a Reebok, I

33:24

want to do this. And he's rich

33:26

enough that he can do anything he likes. And

33:28

so he does. And so

33:31

one of the main thing that I've been

33:33

thinking about this whole segment is this whole

33:35

concept of corporate identity and corporate continuity. You

33:37

know, like, I am not the

33:40

same person that I was when I was five

33:42

years old, but on some level, you know, there

33:44

is this concept of personal identity and that human

33:46

being who was five years old back then is

33:48

the same human being I am now. Corporations

33:51

are different, right? They go through weird

33:54

growth and bankruptcy and whatnot.

33:57

And it's an interesting question to ask is,

33:59

you know, Newsweek today the same thing that

34:02

it was back in the 90s or when

34:04

it was owned by the Washington

34:06

Post? And the answer is no, it's not actually

34:09

the same company. It's just the brand. The company

34:12

is not there at all anymore. What

34:14

I feel we're talking about here with

34:16

Jamie Soultah is that there was a

34:20

really interesting and genuinely

34:22

successful business model

34:24

that he perfected with

34:26

ABG. And it's not just

34:28

brands. It's also celebrities. He got Elvis Presley

34:30

and Marilyn Monroe and Bob Marley. And

34:34

then he, in good old billionaire fashion,

34:36

just decided to do something very

34:38

different. And now he's

34:40

doing something very different. And it's all rolled

34:42

up in his personal business

34:46

vehicle, authentic rounds group. But

34:48

really, it's two entirely different things. With

34:51

Reebok, it was interesting. So he

34:53

bought that for, I think,

34:56

2.5. That

34:59

was from Adidas. And it's not like a

35:01

brand that was dying. No, Reebok isn't what

35:03

it was when it was one

35:06

of the biggest shoe brands on

35:08

the planet decades ago. No,

35:10

it's not that. But it's not a doomed brand.

35:14

It's nowhere close to bankruptcy. Adidas might

35:16

have been able to resuscitate it over

35:19

the next several years. Those

35:21

are all possibilities. Some of these other,

35:23

the early brands he was buying, like

35:25

Nautica and Iza. Was

35:28

there ever going to be a future for

35:30

them that isn't the one that they're currently

35:32

in? I struggled to find

35:34

any other route for that. But with these new brands like

35:37

Reebok, he wants

35:39

to build that into legitimately

35:41

a competitor once more to

35:43

the big sneaker companies. And

35:45

that wasn't a problem with

35:47

the other brands that he

35:49

picked up. Suddenly you're competing

35:51

directly against Nike and Adidas

35:53

and Puma and all

35:56

the big names that we talked about and

35:58

alluded to in that previous story. It's

36:01

whatever this next step is. He said he

36:03

wants to take authentic public in 2026. Yeah,

36:07

they're avoiding that leverage

36:09

trap with these mall brands.

36:11

You think he will though. I feel like

36:13

he is living his best life right now

36:16

as Elon Musk will tell you. You wanna

36:18

be running a private company, you can do

36:20

what you want, you can have the whims.

36:22

No one's gonna tell you no. The minute

36:25

you're running a public company, then you're answerable

36:27

to shareholders, there's a board, there's all manner

36:29

of disclosure obligations. Does he need that? He's

36:31

rich enough that he doesn't. I

36:33

think about that with the previous feature I

36:36

wrote right before this one, was about Michael

36:38

Rubin at Fanatics and how he took over

36:40

the trading card industry through all

36:42

these deals, these quiet deals. And

36:45

that guy in the same

36:47

sort of way is living absolutely his

36:49

best life right now. Taking

36:51

that company public, which they apparently want

36:54

to do eventually, it does put him

36:56

in a totally different situation. And

36:58

is that something you wanna

37:00

do to yourself? Especially when you're riding so

37:03

high. I wrote a big piece for Wired

37:06

Magazine in 2012, something

37:08

like that, about Mark Zuckerberg taking Facebook public,

37:10

which he really, really didn't want to do.

37:13

And he was miserable for years afterwards.

37:16

And the IPO was a complete disaster.

37:19

And yeah, no one wants

37:21

to do it. He only did it because he literally had to,

37:23

he had no choice. If

37:25

you have the choice, just ask

37:27

Patrick Colison, it's right. If you have the choice,

37:29

why would you do it? Yeah, I think very

37:32

different pressures though, because a company

37:34

like Authentic is not gonna have tons of

37:36

early stage venture capital plowed into it. There's

37:38

not gonna be that same pressure to go

37:41

public. Felix, I was just thinking

37:43

about your brand theory and it's like that

37:45

thesis's paradox. It's thesis's ship, yeah. The

37:47

paradox is if you take out all the pieces

37:49

of the boat, like one by one and replace

37:51

them, is it the same boat? And that is

37:54

exactly what you're talking about with these brands. There

37:56

is something in the brand, like even if you

37:58

take away all the pieces of the boat. brand,

38:01

as long as you still have that name, it's still you.

38:04

It's still something. A brand is

38:06

a real thing. It's

38:08

a material good. But let me ask you, Emily,

38:10

let me ask you specifically, the one that comes

38:12

to mind is Bed Bath & Beyond, right? It

38:15

used to be a big retailer. We knew

38:17

exactly what it did. You went into the shop, you

38:19

knew what you would find. It goes completely

38:22

bankrupt. It's completely liquidated. There is

38:24

no corporate continuity whatsoever. And

38:26

then the brand name and nothing

38:29

else is bought

38:31

by overstock.com, which was always

38:33

like this, like really skeevy

38:36

online retailer, which renames

38:38

itself Bed Bath & Beyond, right? And it

38:40

is obvious to me that Bed Bath &

38:42

Beyond as an entity

38:44

today is overstock. It

38:47

is not Bed Bath & Beyond. You

38:49

know, like there were two different companies. One of

38:51

them is called Bed Bath & Beyond today. One

38:53

of them was called Bed Bath & Beyond in

38:55

the past. But like in terms of continuity, in

38:58

terms of Theseus's ship, we have

39:00

two ships and we are still sailing the good

39:02

ship overstock right now. The good

39:04

ship Bed Bath & Beyond sank.

39:06

I haven't done any research on

39:09

this whatsoever, but circuitcity.com exists. Is

39:11

that at all the same as

39:13

the original Circuit City? That

39:16

is the zombiest of brands. No, no. My

39:18

favorite one on that is RadioShack.

39:20

RadioShack became this crazy like crypto

39:22

scam. Wait, what? It did? What?

39:25

Yeah. What? Huh? Are

39:27

you still excited to tell us about this? That's

39:31

literally the full extent of the story

39:33

as I remember it. But like RadioShack

39:36

went bankrupt and then some random crypto

39:38

guy in like Malaysia or something bought

39:40

the IP and turned it into like

39:42

a pump and dump crypto coin scam.

39:45

Kim, you used to report on RadioShack, didn't you? Back

39:47

in the day? I feel like that was the day. You're

39:50

talking. This is like 12 years ago. There's

39:52

so many brands. Yeah. Like

39:55

we talked last week about Tupperware or some.

40:00

great sort of nostalgic thing. But the fact is

40:02

that the number of these brands that used to

40:04

exist and now live in this kind of weird

40:06

limbo state is almost infinite. There are so many

40:08

of them. Zombies everywhere.

40:11

["Zombies Everywhere"] ["Zombies

40:14

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find out more. We

43:06

should talk about Visa, though, because there

43:09

was actual news this week. The Department

43:11

of Justice came out with this antitrust

43:14

complaint against Visa and said, you're

43:17

completely abusing your monopoly. And

43:20

everyone's like, oh, yeah, Visa, the credit card company, right?

43:23

Turns out that the monopoly where they're doing the

43:25

most abuse and where they're making more money than

43:28

they are in credit cards is

43:30

debit cards. And there are more

43:32

than twice as many debit

43:34

card transactions as there are

43:37

credit card transactions. And debit

43:39

is absolutely massive. And

43:41

Visa has a crazy monopoly

43:43

there. It's like, who knew? I didn't

43:45

know. And one thing I'm confused about,

43:48

I think the DOJ

43:50

says Visa has 60 percent. Is

43:53

that right? Are you reported it feel like

43:55

60 percent of all debit transactions are processed

43:57

through Visa? And 65 of cardinal. which is

43:59

like when you do it online. Okay,

44:02

so are all those transactions

44:04

on literal visa brand, call

44:07

little callback to the last segment, visa

44:09

branded cards or is it like

44:12

visas rails are bigger and

44:14

like other cards that aren't visa branded are

44:16

also getting processed by visa? So it's a

44:19

really good question. And the fact is that

44:21

do you wanna have a guess of how

44:23

many debit, what percentage of debit cards have

44:25

a little visa symbol on the front? It's

44:31

even more. And if you look at the share

44:33

of what they call front of card branding, basically

44:36

that has a crazy monopoly for the

44:39

visa. They have 70% market share. Mastercard

44:42

is the only other real player in

44:44

town. It has 25 and then everyone

44:46

else combined has 5% basically. So

44:49

they do in fact have a monopoly. There's

44:52

no debate there. Just the question is, did

44:54

they illegally obtain the monopoly? Well, they have

44:56

a monopoly of this thing called front of

44:58

card branding. In front of card branding is,

45:01

it's basically an ad for visa. It means

45:03

that the card will work on the visa

45:05

network, but it doesn't mean

45:07

that the merchant needs to use the visa

45:09

network in order to put through

45:12

the debit card transaction. That is why

45:14

visas share of debit is only 60 while

45:17

it has its 70% share of branded

45:19

cards. If you take your debit card,

45:22

I will say there's a, well, there's a 70% chance that

45:25

it has a visa logo on the front. If

45:28

you flip it over to the back, there

45:31

may or may not be some other

45:33

logos on there. Then there may be

45:35

like things like nice or star or

45:37

all of these other like debit networks

45:39

that merchants can use to process their

45:41

debit transactions. Those logos do

45:43

not need to be there. So a lot of bank, a

45:46

lot of banks who issue the cards don't even

45:48

bother putting the logos on there, but they still,

45:51

every card needs at least one

45:53

alternative network that it can process

45:55

over. Actually

45:57

don't understand. I've never understood this actually.

46:00

I get my debit card from my bank. My

46:04

bank is a place that their

46:06

job is to take the money and store

46:08

the money and do stuff with the money.

46:10

Why is Visa even involved? Right,

46:13

because your bank will store the money,

46:15

but your bank doesn't move the money.

46:18

So when

46:20

you take your card and you spend it at

46:22

Starbucks, what you are doing is you're basically telling

46:25

Starbucks to take the money out of your

46:27

bank account and put it into their bank

46:29

account. So what

46:32

you need is an intermediary

46:35

that speaks the same language as

46:37

the Starbucks bank and your

46:40

bank. And then that intermediary

46:42

can take the money out of one and move

46:45

it to the other. It's a little bit more

46:47

complicated than that because it's all netted down at

46:49

the end of the day and the money doesn't

46:51

actually move, even though it looks like it moves

46:53

in terms of looking at your bank account. But

46:56

the idea is that what you need

46:59

is one of these intermediaries. There are many

47:01

of these intermediaries that exist. Visa is by

47:03

far the largest. Mastercard is by far the

47:05

second largest. And then there's lots and lots

47:07

of like third and fourth and fifth tier

47:10

networks that will do that.

47:12

But in order to be able to do

47:15

that, you need to be accepted by both

47:17

your bank and by the merchant bank. And

47:19

45 percent of

47:21

the time there is what's known as

47:23

an uncompetitive transaction. Basically, there is no

47:25

other network that is connected, that is

47:27

accepted by both your bank and by

47:29

the merchant bank. And so the merchant

47:31

has to use these. It has no

47:33

choice. And so

47:36

that gives these are this

47:38

incredibly powerful negotiating leverage

47:40

because these are at that point can

47:42

set whatever fee it likes basically up

47:44

to the Durban amendment limit for

47:47

charging the merchant for

47:50

transferring the money over from your bank. And

47:53

the merchant doesn't want to pay like the

47:56

exorbitant, what's known as rack rate that

47:58

Visa charges. And so Visa then

48:01

goes up to the merchant and says, well, okay,

48:04

we won't charge you the exorbitant track

48:06

rate in that 45% of times

48:09

when you have to use us. But in return,

48:11

we want you to use

48:13

us for all of your transactions where

48:15

Visa is accepted, which is gonna be

48:18

more than 95, probably more than 99% of transactions.

48:22

So basically what happens is

48:24

that Visa automatically converts its 45% market

48:26

share that it has

48:28

basically by right into like a 95% market

48:30

share or that

48:32

merchant by saying, only

48:35

that way will you be eligible

48:37

for like a discounted interchange. And

48:39

that's what the DOJ is saying

48:41

is illegal. And to be clear,

48:44

even the discounted interchange is more

48:46

expensive than the rival

48:48

services. But because of this economics, like

48:50

the rival services just don't get a

48:52

look in. And then all our stuff

48:54

is more expensive because of the higher

48:57

fees. That's what the DOJ is alleging,

48:59

that we are all paying more for

49:01

stuff because Visa has a monopoly, can

49:03

charge merchants more than

49:05

anyone else has the pricing power. I

49:07

mean, we should mention that debit interchange

49:09

is tiny compared to credit

49:11

interchange. Credit interchange is like wacko

49:14

expensive. But yes, absolutely. By

49:16

the standards of debit interchange,

49:19

Visa is charging a lot of money. Why

49:22

use a debit card? Credit card, you

49:24

get cash back. I mean, it's costing

49:26

you more. And this is like the

49:28

standard middle class thing. Like

49:31

middle class people just use credit cards everywhere. But it

49:33

turns out that

49:36

if you don't wanna be wacked by some like

49:38

unknown huge bill at the end of the month,

49:41

you wanna be able to stay on top of how much

49:43

money is in your bank account. And if you wanna buy a

49:45

coffee, it makes much more sense to just buy the coffee out

49:47

of the money in your bank account than to borrow

49:50

money, which is what you're doing with a credit card, and

49:52

then hope that you'll have the money to pay

49:54

back that loan when it comes to you. So

49:56

DOJ is really going after the middlemen now. That's

49:58

their thing, right? That's their vibe.

50:01

They're going after Ticketmaster, Apple,

50:03

the Apple store, and it's in its fees.

50:06

Everyone hates the middleman. So it

50:08

makes sense to me. Well, they hate the sort of fees

50:10

that are hidden or tacked on

50:12

at the last minute, and you end

50:15

up paying more than you thought you were going to. They're

50:18

not giving us anything, these middlemen. And

50:20

it is kind of interesting to me from

50:23

a public policy perspective that

50:25

the way that the US

50:27

government is prosecuting this site

50:30

is via antitrust litigation rather

50:32

than doing it the way that every other country

50:35

in the world does it, which is just by

50:37

having a central bank that sets up a payments

50:39

network that clears up power and merely moves back

50:41

and forth freely between bank accounts. And boom,

50:44

that's how everyone pays. But instead, no,

50:46

we leave it all up to the private sector.

50:48

They all try and maximize profits. And then when

50:50

they try too hard to maximize profits, we hit

50:52

them with an antitrust suit. It seems incredibly inefficient

50:55

to me. Also, as a political

50:57

strategy, I was just reading Kamala Harris'

50:59

has this big 82-page thing

51:02

that she put out outlining all her proposals. And

51:04

one of their things is like, we're going to

51:06

lower costs for everyday Americans by going after price

51:08

gouging and going after your ticket masters and

51:10

your apples and your visas. And it's like,

51:13

we won't see the results of that if

51:16

maybe not ever. These suits take

51:18

forever to happen. And then we're

51:20

talking about pennies. These transactions are

51:23

small. If there's any result,

51:25

no one's going to notice. It

51:28

doesn't make a lot of sense politically either. Yeah.

51:30

I mean, the total amount of money that

51:32

Visa is making from its monopoly in debit

51:34

cards is $7 billion a year, which

51:37

is a lot of money. But

51:39

in the grand scheme of how

51:41

much consumers spend each year, you're

51:44

right. Like divide that by the number of transactions. And

51:46

you really are talking a fraction of a penny. Has

51:48

the pace of these antitrust

51:50

lawsuits really increased lately

51:53

under this administration? Because JetBlue was the other

51:55

one, right? That's not a middle man. It

51:57

does seem like they have been trying to get in these.

52:00

suits now, you know, before November. And then the

52:02

question is what happens to them after that? This

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podcast is brought

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and coverage match limited by state law, not

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available in all states. Let's

52:54

have a numbers round. Elizabeth, what's your number? My

52:57

number is 57.9, and that's

53:00

where Ants index on a list

53:03

of search terms of what Americans are trying

53:05

to kill right now. The

53:08

Washington Post took a bunch of search data. Wait, is

53:10

that high or is that low? That's

53:12

high. 100 is the highest, right? Yeah. So

53:15

most of what Americans are trying to kill or

53:17

whenever they type in the search box, how to

53:19

kill X, mostly

53:22

insects, followed by bacteria and mold,

53:24

followed by animals, followed by darker

53:26

stuff. But among the

53:28

insects, which rank or more

53:30

than like index over 50% in terms of overall searches,

53:34

the top three things that Americans want

53:37

to kill are, let's see, ants,

53:40

fleas and flies. And bees

53:42

come up pretty disturbingly high given

53:44

the bee ecology problems. Oh, the

53:46

bees. Really? I

53:49

thought everyone loved bees. I

53:52

think they like them in the abstract. They don't

53:54

like them in their face. As you're talking, there

53:56

are like these two stink bugs on the wall

53:58

of my office and it's like very disgusting. Distracting

54:00

and they are definitely on my top three

54:02

lists of things. I want to kill I mean

54:04

what one of the things that Kim has been

54:06

doing is he's been vaulting over the UN

54:09

barricades in Midtown in order to get to

54:11

work is Stomping on

54:14

every lanternfly that he sees because we

54:16

have been told on site On

54:20

site everyone Did

54:22

you see the story in the Times that said

54:25

the lanternfly problem has like Decreased this year and

54:27

they were like could it be because New Yorkers

54:29

are stomping on the lanternfly I

54:37

just love the conceptually that our entire

54:39

remedy for an invasive insect was just

54:42

everybody just step on them Emily

54:47

what's your number? I'm

54:49

so glad you asked my number

54:51

is 800. That's the number of miles traveled

54:56

by a two-year-old Siamese cat named

54:59

rainbow spelled first

55:01

name rain Ra yne

55:03

last name bow be a you

55:07

You rainbow the two-year-old

55:09

Siamese cat who is from California But

55:12

whose mom and dad this nice couple

55:14

from from California went to Yellowstone Park

55:16

and they took their cat Which we

55:18

can talk about if you want because

55:21

I question that choice don't take your

55:23

cat on holiday to Yellowstone so

55:26

rainbow got lost in Yellowstone and They

55:29

couldn't find him. They looked everywhere. They stayed

55:31

extra days in Yellowstone. Just wanting where is

55:33

rainbow? Where is rainbow until finally a park

55:36

ranger said, you know rainbows probably gone. He

55:38

probably got eaten by some critter You know

55:40

and they were like, okay, so they went home

55:43

Two months later They

55:45

get a call Rainbow is

55:48

in California rainbow has traveled 800

55:50

miles plus from Yellowstone

55:53

all the way outside Sacramento and rainbow

55:56

has a chip rainbows chipped which is

55:58

smart and you know, they They

56:00

found Rainbow, they called him, and he's been

56:02

reunited with his pet family. And

56:05

I think this is a wonderful story. I

56:07

feel like this is the plot of at

56:09

least four Disney movies. I think it is.

56:11

Homeward Bound, I think, is one of the

56:14

Disney movies. I mentioned my friend's cat last

56:16

week, who, where she put a tracker on

56:18

the cat and would see where he went.

56:21

So she was like, why didn't you mention me?

56:23

I'm like, okay. So Amanda Mickle,

56:25

shout out, friend of the pod. Her

56:28

cat, Mr Chicken, is about

56:30

to make the biggest move

56:32

of his life. Mr Chicken

56:35

was kind of a neighborhood cat, and she kind

56:37

of adopted him, but he was always running around

56:40

North London and having all manner

56:42

of adventures. And Amanda

56:45

would check in on him on her app

56:47

and like, where's Mr Chicken now? And where's,

56:49

you know, and that was lots of fun.

56:52

And now Mr Chicken is about

56:54

to move back to New York or move to New York.

56:56

He's never left London in his life, and he's going to

56:58

be living up in the sky in an apartment, and he's

57:00

not going to be able to go out at all. And

57:03

we're all very worried about like what Mr

57:05

Chicken's new life in New York is going

57:08

to be like. This is

57:10

also a great movie, two great movie ideas

57:12

here on Split Money. The Adventures of Mr

57:14

Chicken, I'm so in. It's such a great

57:17

book. Well, his horizontal

57:19

travel will decrease, but his vertical

57:21

travel will increase. Yeah, could he

57:23

roam the building? Inside

57:26

the elevator, probably. Yeah, yeah, no, you need to put

57:28

signs up in the elevator thing. If you see this

57:30

cat, do not let it out. Otherwise,

57:32

it's good. My number

57:34

is 28,902, which is the number of

57:37

dollars that Jean Pritzker needed to replace a

57:48

broken TV in her gym,

57:51

in her house in Los Angeles. This is

57:53

all coming out as part of a divorce

57:55

proceeding between her and her billionaire husband. But

57:58

basically, Ian, she was like, I want this

58:00

house. And he's like, well, it was never

58:02

my house. It all belonged to some trust.

58:04

And how are you going to work? And

58:07

this house is now on the market for $150 million. So

58:10

if anyone wants to buy a big house

58:13

in LA, which is good for

58:16

entertaining, you can

58:18

have lots of fundraisers there. Jean Pritzker

58:21

used to have lots of fundraisers in

58:23

her house. But she was

58:25

staying there after they're separated. And she was

58:27

like, look, this is a big house. Obviously,

58:29

it has a lot of expenses

58:31

associated with it. You have to have the groundskeepers.

58:33

You have to clean the pool. You have to

58:37

empty the dishwasher. I'm sure she didn't do that

58:39

herself. But one of the things that happened is

58:41

that the TV in the gym broke, or A

58:43

TV in the gym broke. And she put in

58:45

this bill saying, I need to replace, I need

58:47

to fix the TV in the gym.

58:49

That will be $28,902, please. And

58:52

the people who, or the trustees who

58:54

owned the house, like, no. The

58:57

reason I chose this number is just

58:59

because there is this point when

59:01

you reach a certain

59:03

level of wealth, where money has no meaning.

59:05

And people will just charge you whatever they

59:07

feel like. They will just make up a

59:09

number for fixing a television. That's

59:11

very like a arrested development. You know,

59:14

what does a banana cost, Michael? Exactly.

59:18

She's just making up a number that

59:20

sounds roughly approximate. The $28,000 isn't like

59:23

for a really fancy television. It's just

59:25

for someone said it's going to cost

59:27

that much money to fix your TV.

59:30

It's not like to replace. I was confused about the

59:32

level. Yeah, yeah, it's not like the television itself is

59:34

some crazy $28,000. I'm

59:36

sure the television itself is probably like

59:39

a wee $150 television. But

59:41

then it's marked up by the company. And then

59:44

they need to do the wiring. And then they need to

59:46

incorporate it into the gym tech. And then they need to

59:48

incorporate the gym tech into the house tech. And then they

59:50

need to make sure that it's all secure. And so that

59:52

no one can hack into the house via the television. And

59:55

they need to have someone to set up a

59:58

fire. I don't know how this comes to. $28,000,

1:00:00

but you can imagine how it could. Well,

1:00:02

to argue just on the side of this

1:00:04

very rich lady with her $28,000 problems, like

1:00:08

when someone comes to your house to

1:00:10

fix something, you're like at their mercy

1:00:12

every time. And they say, this is

1:00:14

going to cost you X amount. Like

1:00:16

you just pay it. It's really hard

1:00:18

to like, there's no comparison shopping. And

1:00:21

if you want a comparison shop to get something

1:00:23

fixed in your house, like God bless you. Like

1:00:25

it just takes so long. I

1:00:27

think there is a shortage of workers. That's

1:00:29

why you have a butler Emily to comparison.

1:00:32

That is why you have, yeah, you never, everything costs

1:00:34

$10,000 no matter what. And

1:00:36

like, you just, you have no

1:00:38

idea what anything is even supposed

1:00:40

to, the ballpark doesn't exist at

1:00:42

all. There's no ballpark. Kim,

1:00:47

what's your number? My number involves a

1:00:49

ballpark. It's 7,301. And

1:00:54

that is the number of major

1:00:56

professional sports games played at the

1:00:59

Oakland Coliseum. In the

1:01:01

history of the Oakland Coliseum. In the

1:01:03

history of the Oakland Coliseum. The

1:01:06

Oakland A's just played their last game

1:01:08

there. And have you seen the videos

1:01:10

on this? So like beloved team, right

1:01:12

in the city, it's

1:01:14

moving to Sacramento first, and then

1:01:17

over to Las Vegas to eventually

1:01:19

land full time. And

1:01:22

it's Oakland's lost all

1:01:24

three of its sports teams now. The

1:01:28

Warriors went to SF and

1:01:30

then the Raiders went to

1:01:32

Vegas and now the A's are going to Vegas.

1:01:35

The videos are so sad. They were scooping up

1:01:38

dirt from the outfield and

1:01:40

like the staff and they were pouring it

1:01:43

into people's leftover cups so they could take

1:01:45

dirt home from the Coliseum.

1:01:48

And there's, you know, kids are

1:01:50

crying and oh goodness.

1:01:52

So what's gonna happen to the,

1:01:54

it's gonna become luxury condos, right?

1:01:56

Everything, one big luxury condo. Enjoy

1:02:00

your stadium. It's

1:02:03

got a nice field in the middle. On

1:02:05

which note, I think that's it for

1:02:07

the main show this week. Thanks, Kim,

1:02:09

for coming on. It's been so much

1:02:12

fun. Thanks to Sharon Downing and Shayna

1:02:14

Roth for producing. Thanks to all of

1:02:16

you guys for listening.

1:02:18

And stay in the feed for

1:02:20

Slate Plus. There's a whole extra Slate Plus segment

1:02:23

in the feed, which is, am I? It's

1:02:26

going to be explosive, Felix. It

1:02:28

is about... It's about nuclear

1:02:30

power and the reopening of the power planet

1:02:32

through Mile Island. So that's all coming up

1:02:34

on Slate Plus, and we will be back

1:02:37

next week with more Slate

1:02:39

Money.