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good thursday morning. welcome to "squawk alley." i'm carl quintanilla, morgan brennan and jon fortt. top story this hour, supreme court upending the nation's internet marketplace, ruling that states can collect state taxes for most online retailers. courtney reagan joins us. >> a big decision from the supreme court today, effectively reversing the pass precedent from the court, when it comes to collecting sales tax from consumers when purchases are made online. so south dakota asked the court to change its 1992 decision that, at the time, sellers don't have to collect sales tax from a buyer if the seller didn't have a physical presence in the state of purchase. this, of course, before e-commerce was a true reality and part of our everyday life. today the court has overturned that 1992 decision with justice kennedy writing the court's p v

prevalence have changed the economy, justice clarence thomas saying he was wrong about his decision requiring physical presence 20 some years ago while chief justice roberts disagrees with today's decision. smaller businesses that were using that 1992 decision as the guiding principle when it comes when to collect sales tax. smaller businesses are often sellers in marketplaces like amazon, walmart, etsy and others those retail sellers do collect online sales tax, which is why this can be confusing. it's the big retailers, though, who are represented by the national federation that are in favor of the decision today because they say this finally levels the playing field in fact, just putting out a statement from its general council, deborah white, saying, in part, today's decision culminates years of tireless work by the retail community to

reverse the preinternet era rule that distorts free markets and puts local brick and mortar or at a competitive disadvantage with their online-only counterparts she goes on to say it's a win for those who believe in free markets and for the consumer this means an increasing array of options fwhoe s both in-stor online with competition for their business based on price, service, selection and value the other side will argue this isn't going to be fair because they can't have that price differential of course, you have everyone who says when this rule went into the place we did not have the marketplace we have today. there was catalogs, ordering over the phone it's very different now and we're all selling to the same consumers. we should all be collecting sales tax. of course, we were all supposed to be putting our own tacks when we bought something and we did not pay that online sales tax. i think we all know that most of us don't keep careful track of things like that.

>> everybody is sending out reactions. >> yeah. >> one from a group saying it will harm innovation with onerous compliance costs the debate will rage on. courtney reagan, thank you former toys "r" us ceo, jerry storch, now ceo. is it going to stunt economic dynamism, where are you? >> this is a victory for common sense and the economic realities of this century. giving e-commerce companies an advantage they clearly did not need it was really a form of tax evasion that accelerated the devise of main street and all brick and mortars including, by the way, the mom and pops who were the hardest hit over these

marketplaces and outside from the internet victory in the retail battlefield should be based on inherent superiority of your business proposition, not on tax policy and the argument that there's me administrative complexity that would make this harder for people is an absole red herring. and an even better position to collect sales taxes which are all done electronically toda justing what they charge and they're totally capable of doing this. >> do you know who this is really good for? member avilara just had an ipo here it is up 26% at this hour. what they do is sort of sort out these tax issues for companies also probably good, it seems to me, for shopify and adobe, who serve as this layer, just having bought magento commerce. i'm wondering if you are a retailer right now, trying to

navigate this space and maybe you don't want to go straight into the arms of amazon, fulf l fulfillment by amazon to get their solution, to you go to one of those other platforms i just mentioned and are they likely to get a big booming business from this >> look, here is the reality amazon today controls almost two-thirds of the search for products that are bought over the internet people don't go to google first. they go to a.mazon first when they want to buy a product if you're not on the amazon marketplace you're invisible to a high degree of search volume for products secondary inflation is to compete with them on their marketplace. they are a distant second to amazon, one-tenth of their size. go on to google quite heavily and pay an arm and a leg for tear search terms and pla listing to compete in the end you really have to be everywhere to be a retailer in the future, including your own

website selling direct to customers. >> jerry, we get this ruling today but it's going to play on a state-by-state basis and company-by-company basis how does that process happen how long could it take >> states that have laws like this are going to push them. there's always been laws in the books, as courtney mentioned, requiring sales taxes to be collected. and most of the states in the country. it's just some haverequired th customer to remit the taxes themselves i would say there will be a rush to collect these revenues because the lack of the sales tax, some of the crisis we've seen in local government funding. and this needs to be addressed quite quickly. it's as if the fedex truck don't use the roads or something and it's free. they use the infrastructure, it's time for them to pay the taxes. i think this will happen very,

very fast because there's money at stake here and it should be collected and it should go to the states and local municipalities. >> jerry, we -- >> go ahead. >> we throw the mom and pop word around a lot but some are pointing out that a lot of the online retailers are small businesses that are run by mom and pop. how is that not onerous? >> mom and pop on main street are collecting taxes every day mom and pop that supports the softball team, they're collecting taxes every day why shouldn't mom and pop working out of a warehouse in some distance place not have to collect a sales tax but someone that happens to support your community has to collect it. i don't think it's good enough to choose which mom and pops they like and which they don't

like tax policy shouldn't be picking winners in the economy i think that's the answer to that in terms of the sales tax collection, mom and pops that work with amazon marketplace simply have to let sam zon collect the taxes for them if they're not capable of collecting sales taxes in all these jurisdictions, i would be shocked. first off, they were doing it for us years ago before they collected sales taxes for themselves and argued it was too administratively complicated even though they were doing it for us at target now, amazon is collecting sales taxes on their first-party sales. i think it's pretty much flipping of a switch for them. again the argument is and always has been a total red herring for 20 years. >> we'll continue to bat this around huge implications today. good to talk to you.

>> take care. >> jerry storch. >> target is up 2% right now as it seems to be one of the winners in this ruling. >> quite a few winners out there if you can find them intel ceo is out after investigation into a past relationship with an employee. josh lipton is at intel headquarters with the latest josh >> jon, we are here at intel headquarters where employees behind me woke up to a big shock this morning their leader, champion and ceo brian krzanich is out. the company saying he had a consensual relationship with an employee, a violation of company policy so the board naming cfo bob swan as interim cfo company also raising q2 guidance told the street it will deliver eps of 99 cents around 17 billion. it next says it will report results later next month on july 26th

krzanich a long-time employee of this chip maker. he joined intel in 1982, was appointed ceo in 2013. his compensation topped $21 million last year alone. bernstein's take said he gets credit for a stock price that jumped about 120% under his watch, easily best the s&p 500 and the dow, roughly in line with the nasdaq. numbers went up under his tenure he presided over a tough transition, from the pc market to potential growth areas. chips for servers, internet of things, memory, programmable processors and new areas like self-driving cars but he also says krzanich presided over a detearation in process, technology leadership making trance ifrt transistors smaller every year

some traders and investors have become excited about intel's rivals, like amd back to you. >> josh, in this, we can't forget specter and meltdown that caused the sto to fall for a little while and i think that fits in around this process intel hasn't been able to do that in a similar pace i wonder if the analysts are able to say what sort of ceo intel looks for next do they look for more of a sales and marketing person like krzanich's predecessor do they even, perhaps, look outside? >> no, he didn't touch on that, jon, what they look for next it's interesting that someone maintains kind of the portfolio

they have now. what he leaves them with is a decent portfolio pc market that we know is steady to declining it's a server business that should continue to generate volume for the company i caught up with roger k with intel, too he thinks they have a decent portfolio. will they have high-growth areas, like the internet of things roger kay wasn't so sure he doesn't think they have the architecture it will be interesting to see who next leads this company, guys. >> josh, thank you intel shares back 2% coming up next, what that surprise news will mean for the chip maker and the largest management issues at stake take a look where the major averages stand at this hour. it is a sea of red dow is down 151 points out of the supreme court as well busy, busy day more "squawk alley" after this break. (indistinguishable muttering)

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a big corporate shake-up this morning brian krzanich's unexpected departure with intel the company says he had a relationship with an employee that violates their policy joining me now harvard business school professor along with jeff

sonnenfeld good morning to both of you. jeff, this is a challenging period for intel in that here is a company that was known mainly for one thing -- pc and server chips that's just made all these acquisitions, expanding into different areas, lots of new executives and suddenly the leader who was the architect of much of that is gone what does intel need to do now >> intel is doing the right thing. it's painful to do it. earlier suggesting this was somehow a consequence of the me too movement i don't believe it's related to that remotely because he said it was consensual we could go through a dozen very high-profile consensual relationships where it violated company policy and where they find somebody with the integrity and the character to stand behind this, that this had been

concealed from the board for a while and that this was -- the rules that start at the top cascade down the line. otherwise an honorable guy, well respected. we had the disappointment in the fa fall, as you talked about. looked like they were recovering he had the wherewithal to put together a deal with amd, which was excited to see what they were going to do, working together on the notebook side. nvidia was running circles around them on ai and their graphics card, something they've had to understand how to master this space better. i think there's a different engineering horsepower they had a fabulous line of internal succession here throughout. >> bill, is this something that's a product of our shifting culture today around how leaders need to act and treat employees, or is this more, hey, just standard procedure this is something that even years ago would have caused a

ceo ouster >> absolutely. it did for hp. and i think it's a tragedy for both intel and brian krzanich. i think brian was doing a good job, like jeff said. particularly he seemed to be comi into his own the last year he has been courageous in speaking out against the muslim ban, charlottesville but, more importantly, stock is up 53% in the last year. and i think he has him on a roll there's always problems in a high-tech company. i ran one. the real issues here is who is going to succeed him they've always gone inside after the great triumphant of noyce and more you had craig barrett and pelilini brian is only the third since the founders i hope they'll go inside the implication from the statement was that they'll form a search committee to look outside. they need somebody with a

high-tech background they should have had that person ready to go. it's nice that bob swan can step in as cfo but that's clearly an interim move they neeng tech-savvy ceo to keep them on the track they're on now somewhat parallels, what satya nadella has done at microsoft. i think they'll stay the course. little surprise, they announced 16% increase in their earnings guidance and the stock falls 2%. so the market, obviously, liked what krzanich was doing. hopefully they can find someone inside to lead them on the direction they're going now. >> jeff, you said something very key. policies like this exist in other companies and you think back to 2012 and lockheed martin

unfold with their expected ceo at the time. how long have these policies existed? given the fact that we are in a day in age where it seems ceos -- more is expected of them not just from a business standpoint but social standpoint how does that -- >> lockheed martin they wound up winning the lottery with the ceo who took over after this guy stumbled, the intended successor. they did quite well with it. it's a shame, they still paid that exiting ceo candidate $3.5 million severance. we wonder what will happen here. that was clearly a misconduct issue. that was 2012. we had david petraeus, of course, in government, dunn in best buy all around that same period going back even earlier, i'm sure bill will remember crusty, honorable great guy after he celebrated his 50th wedding

anniversary, he was having an affair with the director of the board. again, these were all consensual, but that was a mistake. that was at boeing that's where we started to see this enforced where consensual relationships matter we had others where it was outside the job with vendors and reporters. is this the right thing to do? it was outside of work but a vendor to the company. a good guy who deserved another chance he had just lost legitimacy to lead at hp the consistency of the company's values, models start at the top to enforce your own policies are absolutely critical. eah, i think bri is a very good guy and deserves another chance i think he has probably learned from this and bill would agree he has a lot of talent to bring to bear on these charlottesville he had a courageous voice and in tes of restoring this company on technology slips i think he has a great deal to offer. >> yeah. >> bill, before we let both of you --

>> the board is very good. >> go ahead. >> to bill's point, weren't you surprised, bill, there wasn't an internal successor, given all the people we know on this board? it's a great board. >> yes, i am but go ahead she has a question i agree there should have been. >> before we let both of you go, bill, quickly to wrap this up, would you expect to see krzanich end up somewhere else when this all dies down? >> he ought to take a year off and think about what he wants to do next but he's young enough to do other things. this is not a new issue. we had to force one of our top directors in medtronic to leave the board because he had a relationship with an employee of his own company. i think it's very different when it's an employee where you have power situation. i think this board did the right thing. and i think that boards have no choice today and boards that don't do this, i don't respect them i think intel will come back strongly from this. >> lots of repercussions

thanks for walking us through some of it bill and jeff, thank you. >> why a silicon vallepioneer says we should all delete our accounts. plus what some are calling the tax case of the millennium, allowing states to collect we'll check in with former jcpenney ceo ron johnson whoooo. when it comes to travel, i sweat the details.

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facebook is trading from the all-time highs users can access it as a stand-alone app. all properties reach over 1 billion people a month opposing view to this trend, jerry lanier says this is just

the right time to delete all your social media accounts in a new book. >> it seems the rules are changing around technology why shouldn't we all stick around the social media accounts and pressure them to do things differently instead of abandoning ship? >> i don't advocate abandoning ship entirely. i'm asking people to get off of them for a while as a personal growth exercise. in the book i say i don't know you. i don't know if it's the right thing for you to be on these things or not. i'm saying get off of them for a while. get to know the world without the subtle manipulations of these algorithms that are taking your data and trying to change you. then you know yourself well enough to make a decision.

that's all i'm saying. i happen to love silicon valley. my friends and i sold a company to google. i think they're really cool i have a lot of dear friends to facebook last thing i want to do is hurt these companies. i celebrate their success. but, actually, i think pressuring them to change their business model would be the best thing in the world for their shareholder shareholders. >> do you want to hear why >> sure. >> yes >> the reason why is even though -- of the five tech giants, there's only two that depend on what we call the advertising model where they're gathering thaul data and using it to calculate ways to manipulate you subtly. google, face book. of the five, which two have failed to diversify their profit centers? goog sle and facebook, right >> even though facebook has been broken up into multiple apps you're talking about -- >> the profit center is always the same thing of getting your data, convincing advertisers it

gives them an edge, that they'll be left out if they don't do it. if you look at google, facebook, they've made billions of dollars in attempts to twe s to diversir profit amazon, apple, microsoft, they've actually diversified their profit centers my point is that bringing in real economics where people pay for these new videos that facebook is going to give them, which i thin great if they do something like netflix, they can be part of peak tv, get better quality stuff and diversify their profit center this is good for silicon valley. >> of the ten reasons in your book, what do you think is the most persuasive? >> the two that mean the most to me are the last two. there's one about economics, which is what i've been talking about. >> understood. >> there's another one which somehow feels a little out of place here on the trading floor, which is more about spirituality about whether we all start to believe that we're part of some

giant computer and there's not really a soul, there's nothing internal to you but you're this big program that will eventually be consumed. and i don't like that world view when people are participate iiin this system and they're being manipulated they're emerging themselves into this world view that ai will replace people or something. and that really bugs me. so that's separate from a business concern it really kind of gets to me. >> so ai won't replace people? >> ai needs your data. it's another way of people expressing themselves. the reasons companies need your data, they want to be ai companies. we should think about the data as a new way that people provide value. instead ofaking it, we should tell people you're valuable in this new way when we have robots everywhere, that doesn't mean you go on

welfare. you take pride in your data, make it better and better. instead we're telling people we're going to replace you. >> it sounds' lot like what nad ella told jon a few weeks ago, your data will be a kind of currency if you want to trade it for something in return maybe you can. but just to give it away -- >> i believe in markets. taking data and using it to mateplis not a real market let's admit that data is valuable, pay people for it, motivate them to make it better. let's get out of the manipulation business. let's stop laying down the worst so people can manipulate us, mr. putin, but let's leave that aside. >> follow the money we used to say. maybe it's going to be just as much follow the datea. jerry lanier, thank you.

>> great to be here. >> new book on deleting social media -- maybe not deleting it but taking a break "ten arguments for deleting your social media accounts right now" is out now let's get over to contessa brewer for our news update florida's orlando airport is becoming the first in the nation to require a face scan of passengers on all arriving and international departing flights. chinese president xi jinping pledging further economic reform notice opening of chinese markets and also warned against rising trade protectionism, isolationism and populism. israeli prosecutors have charged prime minister benjamin netanyahu's wife with fraud, stands accused of misusing public funds to order lavish

meals from the country's most famous chefs pope francis is encouraging christians to work together to further peace and justice in the world. he asked for greater togetherness at a prayer service. that's the cnbc news update for now. i'll send it back to you, carl. >> contessa, thank you very much let's get to seema mody. hey, seema. >> daimler is the stock of the day in europe, lowering its guidance, citing chinese tariffs on u.s. imports. the first german automaker to issue a profit warning around trade tensions and some analysts say it may not be the last daimler is under pressure, volkswagen, bmw also trading down on this news. keep in mind among 235 fund managers surveyed by bank of america, merrill lynch say trade war was the most commonly sighted risk to markets. big day on the central bank front, switzerland, norway and england keeping their rates on

hold bank of england did say the recent slump is temporary. confidence is picking up pantheon macro says it is more hawkish. it doesn't expect to wait much longer till rates move to the upside the pound is rallying on that, about .6% on the u.s. dollar morgan, back to you? >> thank you, seema. seema mody at hq stay with us on "squawk alley. at the marine mammal center, the environment is everything.

we want to do our very best for each and every animal, and we want to operate a sustainable facility. and pg&e has been a partner helping us to achieve that. we've helped the marine mammal center go solar, install electric vehicle charging stations, and become more energy efficient. pg&e has allowed us to be the most sustainable organization we can be. any time you help a customer, it's a really good feeling. it's especially so when it's a customer that's doing such good and important work for the environment. together, we're building a better california.

forcing online shoppers to pay sales tax. grover norquist is with us good to talk to you again. >> i'm trying to see where you would come down on this. there does seem to be some equality in the decision, the majority argues. there does subject more remote retailers to sales tax what do you think? >> this is much bigger than this this doesn't determine what you can be taxed you could be taxed by a state you don't live in, a city you don't live in. if they do that for businesses, they can do it for individuals states, particularly the loser state, like california, illinois and new york, are annoyed that people leave them, have always been looking for ways to export

their income tax cities want to be able to export their taxes to the suburbs this now becomes infinitily easier the old argument was that a state could tax businesses that live in that state, that had stores in that state but they couldn't reach from alabama fishing tackles online now they can and the sales tax is just the one they've been talking about for years, legislation, federal legislation that fought to export sales taxes always made it clear, they could care less about it their goal was income taxes. that's where the money is. >> there's no money to be made

by state and local governments amazon pays taxes in all 50 states, they're really looking for nickels in the sofa when they say that somebody isn't going to pay their sales tax they've got a little store in vermont and sell in 50 states. that is not -- that's no money to be made there some fiction that there was imagination money that was going to show up it's diminidiminimous on corporate income taxes, connecticut deciding that they were going to tax worldwide. so companies have left connecticut. there's a real challenge here that they have open this had pan

do dora's box you fly through it you have to plow this somewhere. >> sure. >> you once lived there. and if it's not physical presence, what is the rule they make it up. we'll be having cases about this while they do, down the road, it will be very expensive and loser states that have people are flying trying to figure out how to save themselves by exporting taxes out of detroit out of illinois to other states. >> grover, as this unfolds, we're going to have so many more questions and we would love to have you back on to discuss this in even more detail. grover norquist, thank you for joining us on phone. we'll pivot now to ron johnson, former ceo of jcpenney, to get his thoughts on this ruling from the supreme court as well. ron, thank you for joining us.

>> thank you. >> were you surprised? >> no, not at all. i think it's about a decade too late but i think it's the right decision the internet has had an unfair advantage. it's hurt main street and it's just leveling the playing field. i think it's the right thing to do. >> do you think as grover just laid out the argument that this is a pandora's box and sales tax is just the beginning? >> he made a great point and i hadn't thought about that. what would a few percentage make on a sales tax it's actually extraordinary. i've been in retail a long time. at apple we had two stores that were in tax-free states. one up in new hampshire and one in delaware. and they were amongst our highest volume stores as people would drive from neighboring states to buy their computers in the tax-free states. similarly, a lot of these states

will do a two-day weekend tax-free holiday for back to school when i was at target in the '90s, our school uniforms, we would have to plan for six months to have enough inventory, because people would wait to buy to save a few percentage points. so at the margin this does really impact decision making. >> what is the opportunity for technology companies avilara, which went public a few days ago, trying to solve this exact problem, adobe with magento now, offering a cloud layer to simplify this for people what are the implications of this ruling and the likely ripples? >> it's a great thing for shopify, magento and adobe it's very complicated when you get into purchasing. how you take payment and how you collect taxes and these company also specialize in that. they can specialize by state and

really make it easy for the smaller online retailers i expect it to be a big boom for shopify. >> up 1% on this news as well. >> sure. >> so are a number of other retail stocks. does this do anything to move the needle in terms of the brick and mortar versus e-commerce debate that has been playing out in the secular shift we've seen the last couple of years >> it would have moved the needle a lot more a decade ago now a lot of our shopping habits are entrenched people using amazon prime, nearly two-thirds of the online marketplace or at least the growth probably doesn't get impacted too much. but decision making by consumers is always at the margin. what's going to influence them to buy their groceries or their apparel at a store versus online and this is one of those factors that matters.

>> it's a few percentage points and i think it adds up. >> in the early days, though, ron, of amazon, the argument was price. right? you go there for the lowest price. and the past few years, the argument has been about convenience. >> uh-huh. >> how much do you think people who are shopping online are really expecting to get the absolute cheapest price possible >> i think people care about price and convenience. target's stock is up a couple of percent, i heard convenience store that you can buy in your neighborhood or buy online and now that will be kind of the level playing field for them in a lot of ways. i feel like it's a really good thing for customers. and it's a really good thing for the retailers. >> what do you think is the next biggest legal issue facing retail or tech at large that

we'll see be pivotal in the way things go forward? >> i think it's going to be how the government classifies the contract workforce more people work in the mobile workforce, driving for uber, running errands. as we know, most of those people are contractors. we're all employees, right all have employees, salaries, benefits, well trained, have career paths people deserve great jobs and i think government is going to get involved how do you classify these workers? that could happen starting at a state level. i think that's a big issue we have to think through carefully. >> i'm sure there's so many ways that could play out as well. but, ron, thank you for joining us today it's always great to get your insights. >> thank you. >> ron johnson. >> when we come back, betting big on sports. leagues around the country raising concerns over high taxes and fe around betting.

the nba deputy commissioner is with us, ahead of tonight's draft. dow down 122 coming off session lows.

i'm scott wapner here is what's cominup at the top of the hour. how long can tech keep the rest of the market going? plus what today's landmark supreme court ruling means for retail landscape

stocks are falling and call of the day takes on lulu lemon that stock is up 128% in a year. now one analyst is making a big bet on where it goes next. see you at noon. jon, we're about ten minutes away >> ceo announcing a surprising resignation this morning. cfo bob swan stepping in timothy, good morning. i take it you were caught by surprise here as were many of us what do you think intel needs to do leadership wise at this time when they've expanded so far outside of that core business of pc and server chips and need to keep some momentum going >> well, i think the core architecture for intel and all their different product areas are pretty much set in stone for the next few years i don't think that he need to do anything drastic to keep the

business going as is and it's been pretty profitable they announced a good quarter and that was constructive. we're happy what the stock is doing. looking forward you have a number of different business areas and they need to have a leader that really recognizes where to allocate capital. certainly swan is a reputable guy. had a lot of other high powered jobs in other companies. if he goes to full cfo i don't think the market would blink the news of intel outside of the ceo change was extremely positive we'll see how the market reacts to it. >> intel has a chief operating officer now who was cfo. that, i imagine, is going to be an important place to look but also, my mind goes to renee james who came in with brian as president the twof them pitched the board together during ceo succession. is there an issue here why intel

of not able to keep her around inren if renee james was still around her name would be at the top of the list >> this is a transition when a company is going well other than personal indiscretion. people no longer with them may come back. the last time we saw something like this was hewlett-packard. you had a lot of high end talent that wanted the job that didn't and we've seen hewlett-packard suffer from the fact they didn't have a good leadership succession in place. they need to look inward and make sure the street knows it's business as usual at intel >> all right timothy, thanks for being with us >> thanks for having me. the nba holding its 2018 draft at the barclay center in brooklyn days after the golden

state warriors swept the cavs in the finals and the supreme court legalized sports gambling across the country. joining me is mark tatum congratulations on an incredible season incredible finals. i'm sure the draft will being a great. what has the conversation been like in the halls of the league since scotus gave us that decision >> we've been having lots of conversations since scotus made that decision and over the last couple of years we've been having plenty of discussions with our teams, the players association regarding this issue. this opens up a huge opportune obviously we would support a federally regulated framework on sports betting it looks like states are enacting their own local state laws so we're working with local state legislatures to make sure the integrity of the game is maintained at the very highest

levels and that there are consumer safeguards in place to protect consumers. >> a lot of optimism in other leagues that this new ruling would drive engagement or increase attendancethat had been soft eritrea in football or some evidence in baseball this season doesn't sound like engagement in the nba has been necessarily a problem. >> it hasn't we've been fortunate we set another all time attendance record with 22 million this year. our viewership was up for the regular season as well as the post-season and our social media we now have 1.5 billion likes and followers around the world and that continues to grow and grow as well as our merchandise sales being up 25% as well but sports betting, we have found in other parts of the world where sports betting is legalized that fans tend to be more engaged with the product when they are able to bet legally on sports. >> mark, we've had a number of

owners on our air who have said that they expect valuations for their teams to rise because of the legalization of sports betting. is that your anticipation? >> look, we certainly anticipate that valuations -- we've seen valuations grow for franchises significantly over the last several years. what this does it opens up an opportunity for more fans, more consumers to get engaged with the sport, to engage with our product, to buy more merchandise, to visit, watch tv and watch our games on television i think those are the fundamental factors that go into the valuation of a franchise and i think that this will certainly lead to increased revenue, increased profitability and, therefore, increases in valuation. >> is there a model that you look to, maybe outside of the u.s. where a way this has worked whe you think the nba should emulate and perhaps one you think that's maybe a model we

don't want to do that when it comes to how we integrate wagering >> we spend a lot of time internationally. our games including this draft will be broadcast in 215 countries. we spend time with leagues and organizations where sports bet is legalized we picked their brains on what works, what doesn't work we spent a lot of time with the epl and spent time with the tea. we're trying to incorporate the best that others have experienced from sports betting to make sure we have the same protections in place for consumers and the right ways to engage with fans >> mark, the league has become so dynastic with the warriors now three, other teams with some of the best players to ever play the game, just cannot even begin to compete when we're in the finals is that good for the league long

term or not >> i would question whether or not other teams can compete. houston took the golden state warriors to its seventh game if it were not for some injuries and a lot of missed shots who knows. this is the first time in 30 years that you -- almost 40 years you had the two conference finalists go to seven games and have to win on the road. i think fans in boston thought they had a good chance to get to finals i know houston and houston organization thought they had a chance to knock off golden state. what i would say we have to celebrate greatness. what we're seeing today is lebron james, eight straight nba finals he's played with 58 different players over that time then you're looking at one of the greatest shooters to ever play the game inc steph curry so those teams are managed well. operated well. i think that's why you're seeing so much success on the court

from those teams >> nba has international expansion plans in places like europe and china how closely ar watching these escalating trade tensions. is that something that could impact your strategy >> we're always watchi the geopolitical climate what we found is sports is a great way to cut through that and bring people together. we do a lot of work in communities with local governments in china, throughout europe and africa, in india, and it really is about what we're investing in is the development of the game because we see investing in basketball, getting kids, getting young people to play the game of basketball, not only teach them a sport but it keeps them active, keeps them fit, keeps them healthy and so wre always watching the geopolitical climate, but we have built relationships with those local governments and have been in there working with them on programs in the community

>> speaking of youth development, what do you think the narratives will be running through the draft tonight? >> boy, i'll tell you so much talent such a great night where the future generation of nba superstars gets welcomed into our league and there's an enormous amount of talent in this draft players like diondre atteon, a about bahamian then you have marvin dye iii and the duke stand outs. an exciting night. >> we can't wait always good to gate curtain raise with you thanks for your time

mark tatum of the nba. before we go to the "half" check the intel. >> i did want to mention, carl, i was talking about former cfo stacy smith. he left intel. i blanked on that. wait a second he's gone. >> big story today let's get to the "half." ♪ welcome to "halftime report". i'm scott wapner top trade tech take off why that sector keeps surging and is it enough to keep the rallyntact. erin brown is here and katie stockton is here, the founder of fair lead strategies also with us from minneapolis is one pe pete the nasdaq is down a rare