Hi, I'm CNBC producer Katie Kramer. Today on Pod, billionaire investor Mark Lasry is doubling down on debt abroad and on women's sports, but he says opportunities will surprise you. If somebody said to you, 'Well, all you got to do is stand there and somebody's going to slap you,' have you invested in it? No, I haven't. But do you know what the ratings for that are? Off the chart. Off the chart. Bringing aid and maybe some hope to victims of the LA wildfires, sports gear and memorabilia company Fanatics leading the charge. CEO Michael Rubin: 'Anyone of our size who has a platform like we do, you have a real responsibility to use your platform to make a difference.' Plus, where big tech stands in DC, who's not in the MAGA 7? Netflix plus Meta. Mark Zuckerberg's political evolution, what he told podcaster Joe Rogan about competition, content moderation, and the iPhone. 'This is almost a declaration of war.' He's been doing this though for the last five years, maybe longer. It's Monday, January 13th, 2025. Squawk Pod begins right now. Stand by in 3, 2, 1.
Good morning, everybody, and welcome to Squawk Box right here on CNBC. We're live from the NASDAQ MarketSite in Times Square. I'm Becky Quick, along with Joe Kernen and Andrew Ross Sorkin. The gang's all here. We're ready for the week. Stocks were down on Friday after those hotter-than-expected jobs numbers dampened expectations for more interest rate cuts coming from the Fed this year. For the year so far, the Dow is down by 1.4%. It's now down about 4.5% from its all-time high. S&P, or I'm sorry, the Dow is even down more than that. The S&P is down 4.5%. The Dow is down, it was something that caught my attention this morning, 7% off of the all-time high. S&P is down 4.5% from the all-time high. And if you're looking at the NASDAQ, it's down by 3/4 of 1% for the year. From the all-time high, it's off by close to 5%, a little over 5% if you're looking at the NASDAQ 100. Treasury yields have picked up pretty significantly. The 10-year is now yielding 4.78%. The 30-year closed just below 5% on Friday, and you can see it's sitting right at 4.95% right now. And then you have the 2-year, which is all the way up at 4.42%. Again, questions about whether the Fed's going to cut at all after the numbers that we saw on Friday. Bitcoin is down about 9% from 92. Supposedly support. Oil, it's like pushing 80 again. That's always helpful for the inflation picture.
Remember when we said that it just started so slowly with little single-digit like selloffs? You were saying from the beginning that you feel very uncomfortable with the way it starts. Like really quick, big breaks, usually that's like a bull market. But when it starts slow, you kind of write it off. And what's it add up to now? 7% for the Dow. It's 4.5% still, not that much, S&P 500. But if you're talking about a 5%, we haven't noted it, hasn't been something that just shakes your fear. And that's the bad kind. That when it really shakes your fear, it just usually comes right back up. The Russell 2000, it's more than 11% now from an all-time high. So you're talking about correction territory for some of these major averages. And I think transportation's had a really rough day on Friday too. Transports. I think this is the market having to realize that it can't have its cake and eat it too. If you're going to be talking about rate cuts, I don't even think it was strong economy, it was strong economy and inflation on that. But I think we've given up on rate cuts already, maybe one or two. But now we're back. And that was what I was saying to Liz Ann Sonders. I was telling him people are worried about inflation again, and that's why the bonds are acting like that. And a strong jobs number, I said that'd be the worst thing on Friday. And then it did, and it was. And Steve said, 'No, it's not a bad thing,' beforehand. And then it happened, and he says it's still not a bad thing. And then even after it happened, he said it's the... Did you read the Wall Street Journal piece on bonds? I saw it yesterday, so I don't know if it's in today's paper, but I read it online. That's right, it's online. And it's such a weird, it was a kind of convoluted story trying to explain why bond yields going up may not necessarily be a bad thing. And maybe buy into it, but it was kind of convoluted. It cannot be a bad thing if your fear is a weakening economy. If that's an inflation story, then it's a much different... Don't we get inflation numbers this week? Don't we get a couple of them? I think we do, CPI and PPI. I think we get something. I remember that it's, you know what, within a couple of weeks we're going to get something. That is true, we can always count on that.
Meta CEO Mark Zuckerberg slamming rival tech giant Apple on Friday. Here's what he said Friday on an episode of The Joe Rogan Experience. 'They have used that platform to put in place a lot of rules that I think feel arbitrary and feel like, you know, they haven't really invented anything great in a while. It's like Steve Jobs invented the iPhone, and now they're just kind of sitting on it 20 years later.' Zuckerberg said Apple makes money by basically squeezing people and having a 30% tax on developers. Before we play some of these things, we should talk a little bit more about what this means. I mean, this is almost a declaration of war. You rarely see a big company making comments to try and draw in regulatory oversight, but that's certainly what this seemed like. I don't know if you guys... He's been doing this though for the last five years, maybe longer. I think a lot... He's been saying it relatively explicitly. I think his argument has been both the 30% piece is something that's frustrated him immensely on a whole number of levels. Because there have been businesses that they've tried to build on top of the Meta business, like the Meta glasses. He was one of the things said that's the Meta glasses is a separate issue, where the 30% piece is about charging people. And he's tried to build businesses on top of Meta, but then you'd have to be paying the 30% to Apple before you'd be able to build the additional business. We cut off the quote that he was saying on this, but he was saying like the big part of it is they're great for building the ecosystem, but we basically don't want to pay to use the... they don't want to pay to use the ecosystem. And then the second part is the Meta glasses, which is that, you know, my earbuds, where are my earbuds? They connect to the iPhone better than just about any other device that's made by a third party. He said exactly that. And he's been very frustrated. I have the Meta glasses. I like the Meta glasses. I have them too, and I like them. And it is a little bit more complicated to connect those glasses, and it's a little more complicated to connect basically anything to an iPhone relative to an Apple device because they are using a different protocol. Now, one of the points he makes about that, which is so interesting, is he says that they're arguing, 'Well, it's a security thing.' Yes, this is what he said explicitly. They're saying build the security into the service. I'm sure there's elements to that which he's right about, and I'm sure there's elements where he said that this is just an excuse that Apple is using privacy and protections. He thinks it's a big scam, and that's basically what he said on Joe Rogan, that they're just using that as an excuse for any of these things. It's just usually you don't see the big tech companies very publicly saying to the regulators, 'Here's where you should go after them.' It's usually more of a system of whispers, of quiet behind the scenes, or getting other people to be your proxy to go do it. He came out and said it pretty explicitly. And I, you know, this is... they're frenemies, right? They work together on projects and not on other things. I mean, but I think that this is less of a frenemy, this is more of an enemy thing for a long time now. I mean, of the relationships, this has probably been the most complicated over anybody. I think people who are following this know this has been the most complicated. Who's closer to the Trump administration, Zuckerberg, who's trying to make some changes and make some inroads with it, or Tim Cook, who has been there since the last... I was going to say, I think Tim Cook is... I think even Google might be, oddly enough. Yeah. But we'll see. Google's close. I think that privately Sundar has had an oddly interesting relationship with Trump. Then as a solid member of the MAGA 7, who's not in the MAGA 7? Netflix. Netflix is not. But Netflix isn't really... Yeah. Zuckerberg also described the company's relationship with the Biden administration. He said officials berated Facebook staff during requests to remove certain content. 'Basically, these people from the Biden administration would call up our team and like scream at them and curse.' And it's like, these documents are, it's all kind of out there. Did you record any of those phone calls? I don't... no, I don't think we... but I think I want to listen. I mean, there are emails. He said the White House asked Facebook to remove a meme that showed actor Leo DiCaprio pointing at a TV screen advertising a class-action lawsuit for people who took the COVID vaccine. Zuckerberg said that they responded that they were not going to take down humor and satire. Zuckerberg made those comments days after he announced that Meta would end its fact-checking program and replace it with a community-driven structure that's similar to the one on X. Meantime, Meta Platforms terminating major DEI programs. Those include relating to hiring and choosing and training suppliers. Meta said it is changing its course because of what they're saying is the changing legal and policy landscape surrounding DEI efforts in the United States. As a result, Meta cutting its DEI team, replacing equity and inclusion programs with programs that mitigate bias for all, no matter your background. It's also ending representation goals that it had created, that they say set the impression that some of the decisions being made were based on gender or race. Separately, Amazon halting some of its DEI programs as well. A spokesperson declined to detail the exact changes but said it would continue to operate organizations formed to hear worker concerns and advocate for specific groups, including women, Black workers, and military veterans.
And you know, Robbie Starbuck, the power and influence of Robbie Starbuck, that's just... it's just... no, no, but he's just a messenger. It was going... no, he's the messenger. It's collapsing under its own weight. But I think a lot of these companies have either heard from Robbie Starbuck... sure, I think they're about to hear from Robbie Starbuck. But if the problem wasn't there, it wouldn't matter whether Robbie Starbuck, some guy with a man bun, can't just come along and change all of corporate America if it's not ready. It's dying under its own weight, collapsing under its own weight. It's fundamentally probably not a great way to do things if it's not based on merit. We should have learned that by now. We all want to get to a certain place, but if you do it wrong, it's going to collapse. Tech will be next.
Coming up on Squawk Pod, a billionaire's pitch for sports investing. Why Mark Lasry bought and sold the Milwaukee Bucks, a pickleball team, and is now doubling down on women's leagues. Plus, where he's finding other opportunities. Europe, because of what's going on in the Ukraine, because of slow growth there, we're seeing a lot of opportunity. We're seeing that we can lend money and we can overcharge for that. This is Squawk Pod. You're watching Squawk Box on CNBC. I'm Andrew Ross Sorkin, along with Joe Kernen and Becky Quick. All right, let's welcome a special guest who is here to talk sports investments, the markets, and much more. Avenue Capital's chairman and CEO, Mark Lasry. And Mark, we have so much to talk about with you this morning, but I thought we'd start with sports just because you are somebody who looks at sports a little differently than most big investors do. A lot of times people get into it because they're fanboys, they buy a team they love, they hold on to it forever through thick and thin. And you're a little different, you're not so sentimentally involved. You bought the Bucks, sold it at an incredible profit, got into pickleball, sold out of that at a big profit too. You look at sports as an actual business, and you think people don't understand it. What do you see that others maybe miss?
Look, I think part of what people miss is all sports ultimately is how many people are watching it, right? So simple question, like if you think of hockey, half a million people watch it. Baseball, a million. Basketball is a million and a half. All right, bull riding, how many people do you think watch that? 200 million? No, 200,000. You mean 200,000? I hope. Oh, 200,000. Yeah, yeah, yeah. It's a million to 1.2 million. Okay, so it's a much bigger audience. Really? Wow, that shocks me. I know. Sailing, which three years ago didn't exist, there's a sailing league today. You've got 1.8 million. You got more people watching sailing than you did basketball. So to me, part of it is you've got all these sports that people are watching, so you want to sort of get into it and invest in those before they become, I would say, sort of in the national conscience.
So you think baseball's overvalued for the number of people watching, or do you think bull riding is massively undervalued for...?
It's just undervalued. I think what we're trying to do is find sports that are undervalued and invest in those. So that five years from now, as they get their new media deals, that's when you'll capture the upside.
And you've been able to do that by doing what? What are the actions? I know you're involved in women's sports right now. You're buying a lot of women's soccer teams or making bids for them. Where do you see as the most undervalued places that have the most upside potential?
I think it's women's sports. It really is. And the simple reason for that is just as people like, I don't know, do you have little girls? I do, right? So if I would say for Joe and I, our parents, if I have sisters, my dad never brought my sisters and I to a game. It was just my dad and I, right? The idea that you're bringing my daughter, yes, like it's inconceivable to you that you would not bring your daughter. And that's what you're having. You're having this change as more and more people are bringing their daughters and more girls want to watch other women play sports. So you're seeing women's soccer, you're seeing women's volleyball, women's basketball, those are just growing in popularity.
You think that women's sports will only succeed though if more women are watching those sports? So it's a generational issue? Or do you think you're going to ultimately, for it to work, you need men to be watching these sports in significant numbers? I ask because I think if you look at football, it's actually like 60/40 or maybe 70/30 in terms of men to women, but there's still a significant...
Yep, you need to have men watching it. And I think this generation, if you went when the New York Liberty ended up winning the WNBA title, if you went to that, you would have been shocked how many men were there. Yeah. And that's what you're seeing. You need to have men and women watching. But I would say today's generation doesn't care, right? The younger you are, you're going to go to a women's game, you're going to go to a men's game, right?
You know, one of the reasons I really wanted to talk to you, Mark, was what we're watching in college sports right now. The name, image, and likeness money has changed the game entirely. We're talking about things that it's hard to say that these are still going to be student athletes. Focus on the athlete part, not so much on the student part. And I think you see an opportunity here, and I'm trying to figure out what I think of that opportunity. You've said that you'd be looking at some of these college teams, that the colleges are going to sell them or at least majority stakes in them. That is hard enough for me to get my head around. How does it work? Why does it work? And how is it going to change things?
They don't have a choice, you know. And the simple reason they don't is kids are getting paid. So whereas for me growing up, the dream was to go play at Duke or go play at Kentucky or UCLA. Today, if you're a kid, if you're getting paid money from University of Louisville and that's more than you're getting from Duke, you're going to go there. And so the cost of that is going up. And the problem for universities is you need that money to attract those students. And the only way you're going to get that money is either alumni are going to give you more. But the problem with that is it's no longer a tax deduction. So if you, I don't know where you went, but if you, Rutgers, okay, so Rutgers, for Rutgers to get people to go, you've got to donate. But if you donate to the university, it's 100% tax deduction. If you donate to the athletic department, it's not. So therefore, you're going to find it's going to get more and more expensive. And what you're going to end up doing is selling these businesses, not 100%, but you'll sell 50% of that so that you can keep attracting students. And as you attract students, it's great for the institution.
But if you see an opportunity there, it's because you think more can be done, more profit can be generated from this. Isn't the university giving up on that profit if they're selling out on it early at a lower amount?
100%. No, universities understand that. But universities need the capital because through the capital, more people are going to come to the games. And as more people come to the games, more people go to the university. So they understand that. And it's either alumni going to give you that money or it's going to be people like us.
But you think it's an important flywheel that they don't have more students who are attracted to the university if they don't build these big programs?
They don't have a choice. And it's sad because I think college sports is getting dominated by, you know, Ohio, Michigan, and all of those. And you're going to have like for Rutgers, it's going to be hard. Yeah. So Rutgers needs to attract more students who are going to come, and the way they're going to do that is those students are going to get paid.
And the opportunity for you and the places that you're doing this, can you talk about any of the places that you're actually working on a bid right now?
Yeah, I mean, we're talking to a number of universities. And for us, if you say a university is making 100 million from that, we'll buy half of it. And we'll end up paying like around 12 times. So the university is going to get about 600 million, and that helps them over the next five years to 10 years to compete and to build and grow.
How much do you think of all of this as a venture capital style approach versus a private equity style approach?
I think it's very much private equity. I don't think you...
You don't think that there is going to be a bunch of home runs in here and a bunch of bankruptcies when this is all over?
No, because you're investing in programs that exist. Oh no, on the college sports side. I'm just saying on... I'm saying broadly speaking, you got the college piece here, you got women's sports, you got sailing, you got all sorts of things in here. And I'm just sort of wondering, do you say to yourself, you know what, I may strike out a whole bunch of times here, but I think that there's so many, you know, not so many, but even a couple of massive winners in here that it's all going to sort of make it, you know, come out wash in a good way?
No, I think it's very much private equity. And the reason for that is I have the cheat code. Like, how would you like when you were in high school and you already knew the answers to the test? You'd love that, right? You think you got the answers? Well, I do. And I'll tell you why. It's actually really simple. After it ends up being on TV, we now know what the ratings are. So why did I invest in bull riding? Because I saw that ratings every year for three years went up. I'm not investing in things where ratings are going down and people aren't watching. I'm only doing it after I see that people are doing it. So the fact that you've got the ratings every day after something plays, that's what you've had in women's sports. Women's sports ratings have grown astronomically. So I'm not really taking any chances. That's the difference. Like, I'll give you an example, and I got in trouble for it. There's a new league, the Slapping League. Yep, I know the league, yeah. And for a hot minute, David Zaslav, I think, was broadcasting some of it. I don't think he is right now, right? But that league started out of nowhere. And if somebody said to you, 'Well, all you got to do is stand there and somebody's going to slap you,' right? I was telling... Have you invested in it? No, I haven't. Okay. But do you know what the ratings for that are? Off the charts. Yes. And that's my... It's mesmerizing. I know, but it shouldn't be. It's... yes, but we know the answer, right? And that's why it's not venture. The fact that Power Slap has taken the United States by storm is phenomenal. But you and I would have said that makes no sense. Yet Americans are watching. No, no, it makes a lot of sense. It's just then the question of what do you do about that, whether you should allow it to continue.
Mark, let's talk to you about the broader markets. You are somebody who's always looked for distress, distressed deals, and found really great opportunities. Are you seeing any of those opportunities right now? Are you holding dry powder hoping for some opportunities to step up? You have more opportunities outside the US?
You know, in the US today, there's a lot of liquidity. I would say everybody is positive of what's happening and thinks that over the course of next year, you're going to have a market that's going to be going up. Europe, because of what's going on in the Ukraine, because of slow growth there, we're seeing a lot of opportunity. We're seeing that we can lend money and we can overcharge for that. Here in the United States, it's just much harder for that.
That was going to be my question. How much of you are you playing around with the sports stuff, and how much are you still doing this? This is what you do. And I was going to ask whether, how's Lickstein looking for their crappy distressed debt? Pretty good, if you... or take your pick. That's what you do, is it? And that's continuing. How much of your business is still that, and how much is this other stuff? You're, I think you're kind of dabbling in this other... Did you buy the PBR stuff? Are you dealing with Ari?
Yes, I am. I am dealing with Ari.
You are? I'd be getting a cut of all these things. I get nothing. I pay him. Why? I don't understand. So yeah, because he's PBR, right? He's PBR.
So 90% of what we do is our core business, which is lending. And 10% is on the sports side. The sports side is just far more interesting. It's high profile. You have big investors like a Steph Curry.
And without Wes, without Wes, you wouldn't be doing any of this, I don't think. Wes Edens. Yeah, but we're not partners anymore. I know, but he talked you into that. I just know the story that it was going to be too much. And yes, he did. Slapped you and he said, 'Stop whining and get in here.' Next thing you know, you got 10 times your money or something.
There was about 10 times more money.
