carol: welcome to "bloomberg businessweek." we are inside the magazine's headquarters in new york. this week, the biggest names from the nba technology summit paul, granteached hill and the sacramento kings owner and more. they all sat down with "bloomberg businessweek" to talk trends in media and sports.

we begin with one of the largest real estate and business stories of the year -- amazon pulling out of its plans to build a second headquarters in new york acrossnd queens, just the river from where we stand right now. it is pretty amazing, this played out like a reality show. >> it was incredible, it really was. you have local politicians, national politicians in one of the world's biggest companies trying to move to new york and ultimately saying it's not worth the trouble. carol: you have cities and states court these big companies, give them tax breaks. it often works out with the company settling in the state with the best incentives. what happened here? >> ultimately, amazon and the politicians and their staffs

ultimately totally missed their political moment in a really big way. the district right next to this one is owned by alexandria ocasio-cortez. the local politicians in this district, be they in the city council or state senate, opposed this deal vehemently. andeff bezos sent deputies other folks to negotiate with the city of new york. what happened there? why didn't he show up? >> after the political firestorm, there was a series of meetings with the city council and jeff bezos did not make an appearance. those executives were on the defensive. they had to defend amazon's deal to move to the city, a deal with i support facial recognition to support-- ice facial recognition technology. they found themselves having to justify amazon itself rather

than just this one real estate. carol: they've had over a week to digest this story. what does it mean more broadly for commercial real estate, companies looking to come and play city, this whole idea of incentives? >> bill de blasio's administration is incredibly frustrated by this. the vast majority of these subsidies came from the state, came from andrew cuomo. they felt like they were already doing their part to protect the city and they are getting a bad rap. long island city is already booming. a lot of developers are afraid there will be a glut of housing that. g -- a glut of housing there. carol: i wonder if there's a

ripple effect in other states, other big tech companies, perhaps. big tech is on everyone's radar. there will whether be backlash against other big tech around the country. >> sure. fromw a representatives seattle coming to new york and saying here's what happened with our city. san francisco is a company town to protect more broadly -- carol: exactly what amazon was trying to avoid. york, ae looked at new city that was already quite expensive, didn't need this added boost -- i'm not sure this would have played out the same way at some secondary or tertiary city. >> an amazing story. shock all of us in the newsroom

when the headline crossed. taylor riggs is here with another look at the amazon story. we know amazon not expanding into new york. it has been expanding its real estate footprint elsewhere. have the chart showing how their composition is made up. in white is there data centers. you can see what a big portion data centers have become for amazon. this is their office space. space hasnd office been increasing in their portfolio. ony are now focusing nashville and virginia. green, their physical stores. they been mostly online -- they've been mostly online. to see the great

overall footprint growing. coming up next, we asked the owner of the washington wizards and washington capitals how northern virginia landed hq2. amy brooks talks about the growing cloud of social media. this is "bloomberg businessweek ." ♪

carol: welcome back to "bloomberg businessweek." join jason kelly and me for "bloomberg businessweek" every week on the radio. itunes,t our podcast on soundcloud and bloomberg.com. you can also find us online on businessweek.com and our mobile app. we went to charlotte, north carolina for the nba technology summit. ted leonsis sat with us to talk

about the many hats he wears. he is their chairman and --ertainment, owner of the he is the owner and chairman of monumental sports entertainment, the owner of the washington wizards and washington capitals -- >> the nba is a platform that is no different than google or amazon. we have a big corporate structure, we have multiple apps, nba, wnba, g league, nba 2k, summer league. the data we generate is deeper, more real-time than anything you cover it bloomberg in business and industry. just as your company grew as a platform, it started terminals to a small group and now, it is

a giant media company focused on financial services, i believe the nba will continue to grow on a global basis. >> it feels like the nba is around the corner from other leagues. online,i was at america we did the first deal with commissioner stern, commissioner.com. [laughter] ted: he started this tech conference. it's one of the most important industry events. it's everyone who is in intoology wants to come media because our game, our sport is the most valuable mediat, the most valuable in the landscape. it is very prevalent to older people -- i call this modern

nostalgia. --alk by kareem abdul-jabbar i grew up with kareem. very relevant to millennials. it's very relevant to the next who will never get who will never get cable, who want to interact with entertainment and stars. we are leaders in e-sports. i've been making huge investments in e-sports. with the ownerid of the golden state warriors. to superset all of leagues in terms of

engagement. because it started globally. it didn't start in north america. it is something that started globally. it is free to get started. epic and investment in in fortnite. it is the perfect communal game. it's kids getting together and , they are talking with their friends, and it has become a platform. >> that has become a juggernaut. did you anticipate that? ted: yes. [laughter] >> touche. >> what is it about fortnite? it caught a lot of people off guard. it really came out of nowhere to a lot of people. ted: the management team, the leadership team of epic's long time in that industry. the founder and ceo has a good touch with the publishers and studios, understanding what's

going on. he was able to make an exchange. free a realyou for communal piece of software that will activate friendships, activate viewing. i think it's the first multiuser game that was designed to be easy to follow. carol: catch more of our conversation with ted leonsis in our bloomberg businessweek extra podcast. amy brooks is the nba's president of t marketing and business operations -- team marketing and business operations. she talked about the league embracing social media. >> only 1% of our fans will ever come to our games. our games are here.

we are very fortunate because our players embrace social media. they are great global brands. we are very fortunate because how do you balance that? >> we see our games on tv as meals and all the social media content as snacks. our teams and players are developing content. we are developing content. we have 1.5 billion followers. our job is to engage fans globally everywhere we can. testing and learning is a big part of that. >> traditionally, we go to a game, you have men and women,

you have e-sports, you have streaming. >> we think the engaging side of the broadcast, there's a lot of potential. --have our in b.a.t. league our nba g league broadcast on twitch. league games broadcast on twitch. test.of things to >> we talk about e-sports a lot. where the biggest growth? as a way tosports engage our fans. internationally. >> you were just in china. talk about that as an opportunity. what are the challenges? it is a massive market. everyone has a china strategy. >> we have 3 million people who

-- 300 million people who play basketball there. we have phenomenal partners. number ofed at the people who love basketball there. forward-looking, so tech savvy, and they love consuming nba anyway they can. -- up next, the sacramento kings owner on the future of games in an arena. we will hear from a leading on how sometalist of the smartest machines are actually job creators. ♪

carol: welcome to "bloomberg businessweek." i'm carol massar. you can hear us on 106.1 in boston, a.m. 960 in the bay area and dab did in the bloomberg digital app -- dab di and the bloomberg business at. -- dab digital and the bloomberg business app. >> we've always been on the cutting edge. we see sports betting is opening up a whole new avenue of entertainment, engagement and opportunity for our fans. constantly from

owners how much they like the leadership of this league. i'm not sure that is true in every sport. what is it about the leadership of this particular league that works well for an owner like you? >> first of all, they've always been on the right side of history. silver --n and adam dave has not been afraid to step out and be on the right side. city, weg in this pulled the plug on that a few years ago when we felt the laws were vindictive towards certain segments of society. so, our leaders have not been afraid to step out. and do what's right. there's also been a recognition that it's all about the players. inclusive -- are in our league, we are inclusive.

and to that a global outlook -- add to that a global outlook. >> you're not afraid to step out, either. a widely watched and circulated video online if you on the court when there was unrest, protests in sacramento. you've been instrumental in reviving that area. you have people strongly on both sides of an issue. >> there's only 30 nba teams. team is owner of an nba a privilege, and honor. it also comes with responsibility. to me, using that as a platform to make a difference and have an impact is really an obligation and responsibility.

when i bought the team, i laid out a mission statement for the team. to build a winning franchise. thosenhances the lives of touching it and makes the world a better place. everyone repeats this mission, whether you are in the business -- if, if your employer you are a player. >> this is a constant theme. it is all about the players today. they have amazing platforms on social media. they are emboldened by owners like you and the league to speak out on all sorts of things. how do you strike that balance between being a cohesive team and allowing these careers and brands to blossom? >> and you have to be profitable. [laughter] >> it's like a jazz band.

the old model, everyone marched to the beat of a single drunk and robotic fashion -- in robotic fashion. now, it is like a jazz band. each one of them feels like they can do their own thing. at the end of the day, we all come together as music. >> you've been there for a while. what's different than five years ago, 10 years ago? -- you happened is realize you don't really own the team. the team belongs to the fans, the city, the media. the next generation of owners is tech savvy, socially aware and socially responsible. desire to have a lot of fun with it, but also to

do good. carol: technology was a big theme at the nba tech summit. a reminder that automation is making its way into all aspects of our world. that has led to a new round of worries that robots will replace workers. we dig into why automation doesn't have to be such a scary concept. in fact, it may create more demand for workers. economy, weneral are use to something on the order of 2% inflation every year. that's prices increasing. in the technology industry, in most sectors, there is extraordinary levels of deflation. 1981, one gigabyte of storage would cost $500,000. today, it is $.30.

new business models can be unlocked. costnternet is a very low piece of communication technology, allowing technology etsyof work -- upwork or to facilitate people participating in the economy. software itself in general is becoming a much larger portion of the economy. in some of the other large industries like banking or telecommunications, there were a handful of large companies that emerged. in software, there is a large inber of companies -- industries like entertainment and retail, you have companies thatnetflix and amazon start to take over more industry. software is very scalable. in the old days, you would have

a piece of technology like a machine, a handful of people use it to be productive. with software, you can build gmail and put it on the internet and one billing people can use it to become more productive. the ratio can favor labor because a smaller amount of capital can make more people productive. >> that helps explain where we are in this environment. trying to understand why we continue to have this strong labor force, no signs of inflation. ofthere certainly is a lot -- people talk about substitute goods and complement regards. when they do technology emerges -- when a new technology replace aou might

test replace a tesask -- >> i don't have to call a cab. >> cars are an interesting example of a couple mentally good -- complement three good. -- complementary good. if battery prices go down -- certain software and technology, as they go down and cost, the human labor can become more valuable. there's a great book that talks about how machine learning can cause human judgment to go up in value. chat, checkof our out our bloomberg businessweek extra podcast. next, more from the nba all-star tech summit. also, how blackstone became the world's largest landlord and caught the attention of its peers. hear store you need to d

before you decide to buy a car with solar panels. this is "bloomberg businessweek ." ♪

♪ joe: -- carol: welcome back to "bloomberg's miss week." -- "bloomberg businessweek." still to come, we have the head of blackstone david blister. in speaking of blackstone, in there isestate issue,

a piece on blackstone's real estate model. jason kelly and i spoke to the reporter. jason: you go back 11 years, right, and they have had -- >> you go back 11 years, and they have had real estate, but it was small. then they get presented with purchase a $39 billion deal. it doubles, more than doubles the size of their portfolio. i think almost immediately after , the signs are flashing big-time. they make up a ton after the financial crisis.

billion. it has become a winner so much that everyone wants to do the blackstone model. jason: it's pretty amazing. it certainly was the pivotal year. i remember it well. 2007. on gray, the architect of all of this, sees everything happening and he is literally selling while he is buying and offloading -- reporter: it could have been a disaster. jason: and he follows that up by buying at the peak and again come up for years that looks like a disaster. they are able to navigate -- reporter: single-family homes. jason: let's talk about that. reporter: they made money on the turn. but i think it was a successful play on interest rates. they were going to remain low for a long time. they saw they could produce this folio because people -- the

people did not think they could. they got an 8% yield or something. i do not know exactly the yield they ended up getting. if you thought they were going to go back up quickly, it would have been attractive. but they saw this low period, and the new they had an opportunity and others have not been as successful, right? have merged. others have moved on. they really made it work and it's just to their march through the real estate sector. they are going after large properties in the far east. they have been buying logistics -type places to make a play on amazon and they are using that to leverage it back to the private equity business and the hilton deal was a perfect example. they are using that knowledge across teams. i think the problem they have is they have $900 billion across

private equity firms. there's about $300 billion in dry powder. this is a nice, liquid market. a lot of people want in. interest rates are not going further lower. they are probably going higher, although not very fast. the question is whether this gets too crowded. also, this makes them even bigger juggernauts. world'sne is the largest landowner. it puts a bigger target on the back for people like elizabeth warren and others. carol: so, he was telling us about blackstone on the back page of the magazine. >> it's incredible. 40 million dollars, that's a small piece of the puzzle for blacks in. there are two competing -- a small piece of the puzzle for blackstone.

there are two competing pieces. you have the federal reserve coming in. also, there's a concerted effort to get into the real estate market. it has traditionally been more it has really has, worked out them. interestingly, some of the real estate portfolio has a larger then somemarket cap of the s&p 500. a huge folio. carol: and important to their investment strategy at this point. thank you. we will have more on lax tone when we talk with the head of operations. solar panels and how one of the magazine reporters found that things had been complicated buying a home with pre-existing solar contracts. here is editor dan ferrara. she was very excited about buying a home and very excited

that there were solar panels on the garage. like most of us, we are excited about the opportunity to -- you know -- carol: have a green moment. .an: to be part of that what she learned was the solar system did not come with the house. however, the obligation, the 20-year least the previous owner had just begun. he died recently. the 20-your obligation did come with a house. she would have to assume that least if she bought the house. there were a lot of publications, including the fact that the person she bought from had an extraordinary amount of electronic equipment, a very high electric bill. she had to assume that bill, which was much in excess of what she was using currently and much-anticipated using. the whole thing seemed strange and as a journalist she began looking into this program or this business model which is

called third-party owner solar. carol: i would want solar, right because i would think it was the right thing for the environment, with the contract -- you would think, come and take the equipment, but it's not that easy? dan: if she were to buy the or if she were to sell the home, the next seller would have to some the contract. every buyer down the line would have to. there's a lot of peculiarities about this particular story, one of which is california and some of the la and thee books requirements of the state has for homeowners going forward. everyn: -- dan: if the new

home built test web solar. if you don't have the money to put it on right now, you might engage with, again, one of these third-party owners or tpo companies, the large of which is called -- the largest of which is called sunrise. jason: tell us about that righty because she gets to the ceo and here's it straight from her that it has been a successful company and has really taken advantage of -- going to say it again -- this tgeist of of -- zei wanting to do right by the world. in other countries people overwhelmingly by solar systems and they are able to do that because the government supports it in a simple manner. you want to buy stuff and put it on your home. they pay you for that. they will pay you subsidies. they give you read these. in our country, if you are in a position to do that -- and it

cost in the neighborhood of deceased- if the homeowner had bought it outright, it would have been a really good deal. claimuld then be able to a tax credit for 30% of the cost of the system april. claiming a tax credit will always be less appealing than simply getting paid, right? that is one reason, in addition to the size of the credit, that third-party solar is more popular. it's really not prominent in other countries. carol: up next, one of the most prolific sports investors david blitzer. also an nba great. this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." i am carol massar. during jason kelly mean for "bloomberg businessweek" every day on the radio up your you can also catch up on our daily show by listening to our podcast on bloomberg.com. 20thiggest names from the companynology all-star partner ofnaging sports entertainment, also the co-owner of the philadelphia 76ers. year grows so dramatically. we have colorful players that really seem to dominate social media. it is fun to watch that engagement.

it's just going from strength to strength. having the athleticism of what is on the court -- and frankly is giving folks at home and .round the world what they want jason: it seems the league and owners have not just allow this to happen but enabled us to happen. >> absolutely. the entire management team is incredible and i think they saw this and they saw it early in the saw the connection that could be made tween the league and the player with the fan base given what was going on for distribution standpoint, with are consuming media and more importantly how the trend was going. i think they know. carol: it's fascinating because

this summit has been going on for 20 years. a tech summit 20 years ago. adam was on it. i was just speaking to michael rubin. i think he has been on the panel at every summit, 19 or 20 years. this is ahead of the curve. has technology change the opportunity of owning an nba team? summarys changed in ways. talk about the player connection with the fan base. jo ellen beat was on the street and someone was talking trash to them octave playground -- trash to them on a playground court biid just dunks on him. it was not set up. that is joel and that is the dynamic.

that is one area. a beasley, you have the new arena and what is going on inside. it's incredible -- obviously, you have the new arena and what is going on inside. the golden state warriors, the arena. the technology going in and the engagement with the fan base is incredible. have seen technology change just about everything we do and we are bringing it into the sports scene, and particularly into the nba. it's incredible. nba goes from strength to strength. we have the opportunity of playing this game in the industry and i have to tell you, is amazing. just the excitement that was driving in china. walking out of the hotel and the

people around in the arena, just the numbers, the sheer numbers. you think about the ability to connect with that span in northern china from the court in philadelphia or boston or pick your arena -- it is amazing. greg hill has done it all. nba all-star, vice chair of the atlanta hawks. -- grant hill has done it all. >> win the game is not going on, there are hit on the court, so you are constantly being stimulated, which is important. but you want to share with your entire network. you are going to be on instagram. you are going to be on snapchat. you are going to own your friends. we have to adapt and adjust

every day. one group that has certainly embrace technology is nba players. it feels like the nba and owners have enabled that with maybe an eye toward -- we do not know how this is going to go. how do you think about players, social media and the brand that they are building? >> i think the technology summit -- this has been his baby for 20 years. but first of all, believing in nba markets its player. it's more about the individual than the team. so lebron james or chris paul or james harden, as a fan, you feel like you know them.

he was wellan, known and recognized all over the world, but he has really .mbraced technology they can speak to wrigley to an audience. to their fans. i think it encourages them and can desk interviews to the desire to speak out on things, injustices. a lot.we talk about that you have an amazing platform. for your players, for your viewers. when you see all the things that are going on, what is your responsibility? >> obviously, you want to be authentic. there are things that have happened during the course of

our ownership, and one of the things that have been discussed, it's ok, speak from the heart. we want to make sure you are informed and educated. the great thing about technology, unless -- unlike 25 billion years ago, now we have access to information. if i'm playing in detroit and something happens in cleveland on might not know about it. but i can find out and have the ability to really learn. whether you are a player or an owner, you want to be responsible. i have done that. i am on social media. i have spoken out. you can go on my page and see how i feel about everything. it is a balance. we have customers who do not .ecessarily agree with that you want to because ms. and of that. you want to be aware of that. -- you want to become a present

of that. you want to be aware of that. you may not agree on everything, but they will come to an atlanta hawks game in support and sheer and be totally invested -- support and cheer and be totally invested. you will bring people together. i think sport can play a role. thing the single biggest that has changed today for player since you were a player? there is such an emphasis now on west, on recovery. not the biggest thing, but i have a lot of injuries throughout my career -- carol: do you think that if you had more rest, back then, you would not have any injuries? would playn, you

through anything. you would take it up and go. now you think a picture. , take ad rather rest week off. i know a lot of the oldheads like me resent that. our guest who, represents lebron james and others. this is "bloomberg businessweek ." ♪

carol: welcome back to "bloomberg businessweek." i'm carol massar. you can also listen to us on the on sirius xm channel 19. on the also listen to us bloomberg business app. super agentng about rich paul.

he represents lebron james among others. we caught up with them and talked about developing nba players as a brand. >> the game is everything for us. that is what we focus on. we try to educate, when there are new players coming into the league and their families, to have an evaluation of what is available. , kids want toion see it. and there is no brand out there paying me a million dollars. what is it about? it's about notoriety. let's focus on the game. because the game is going to bring forth everything.

the player is already there. he is the player. if your game grows, steph curry 's game evolved. .hampion that is business growth. that is how that works. everybody cannot be lebron. a hundred million dollar contract and deals to start. guys.about the he was the new guy. today.e is a personality mith on aw stephen a. s mcdonald's commercial. 10 years ago that is an athlete. aligney don't need to

with someone on tv because everyone is on tv. i have a smart phone. everyone is on tv. the partnership of yesterday has become instagram today. that's a six-month deal. like lebron who is so established, who put his heart and soul and time into the game, right, what are the conversations you have with him about brand and how do you play it in this evolved environment? lebron, from a very young age, we have always thought about partnerships that align with who he was. most brands that he has partnerships with our genuine to who he is as a person and every commercial that we did, there was some type of story, his

story or there's a message, hidden message. whether it was nike or sprite, you would never think to do something and today, i can't get lebron office couch for money. money does not move him today. people when you say that, really? you have lebron, how are you going to have time to get a deal for me. lebron is not moving. today, time with family is much more important. one thing you understand, when theyave partnerships, don't what days in the season. they want days in the summer. the more partnerships to have, the less days in the summer you have an people do not understand that. carol: "bloomberg businessweek" is available on newsstands and also online at businessweek.com and our mobile app.

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david: why did you decide to write a book on leadership? >> what really intrigued me in graduate school, our leaders born or made? his best friend came to the site -- came to hisn, side and said, lincoln, you must rally or die. david: would you fix your type please? people would not recognize me. leave it this way. alright.