live from new york where business never sleeps this is "squawk box. good morning welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. our guest host is joe terranovt, a cnbc contributor and a frequent guest here. good to see you. >> good morning. >> we have a lot to talk about let's start off what's happening with the u.s. equity futures yesterday markets were higher. this morning things are relatively flat. dow indicated down by 8 points s&p off by 1.5 s&p off also the nikkei closed higher by 1.36%. 24,120 hang seng up by a quarter percentage point and the shanghai up by 1%.

red arrows across the board in europe the dax down by three quarters of a percent but then look at italy, down by 3.1% spain off by 1%. finally treasury yields closed out at 3.05% the ten-year yield lower this morning at 3.037%. our top corporate story, the securities and exchange commission charging elon musk with fraud leslie picker has all the details. >> reporter: the s.e.c. alleges that musk made false and misleading tweets when he said he was taking tesla private at $420 and funding was secured the s.e.c. says investors who purchased stock after those tweets but before accurate information was disseminated were harmed. the s.e.c. said musk had not secured an agreement from any

potential funding source tesla plunged in the aftermarket and is still down this morning the s.e.c. is seeking to ban musk from serving as an executive or director of a publicly traded company and that could affect his role as the head of tesla. musk said in a statement that the action by the s.e.c. leaves him deeply saddened and disappointed and that he has always taken action in the best interests of truth, transparency and investors. musk says integrity is the most important value in his life and facts will show he never compromised this in any way. the claim details a tick tock of events it reveals conversations with a sovereign investment fund which we know to be saudi arabia, and a private equity firm where high-level take-private discussions were had, but were void of any details. the s.e.c. says in the claim that musk did not discuss the tweets with anyone else, his board, employees, advisers, or even the nasdaq where tesla

shares are listed before publishing them to his 22 million followers. >> leslie, thank you for that. to put a bit of context around some of this, because i spent last night on the phones with a number of sources involved in this situation, i can tell that you the sources tell us that actually a settlement was near, literally ready to go yesterday morning for both sides, it included what was described as a no-admit, no-deny. so he would not have had to accept any guilt in this at all. there would have been no penalty beyond a financial penalty i'm told the penalty was described as nominal it would have gone to him as well as to tesla, the company and that he woke up in the morning, the plan was to sign the settlement, he said to the team, how ever it happened, that he felt if he did that, he wouldn't be truthful to himself and he could not live with the idea effectively that he would

be settling something and accepting whatever you think is the taint of a settlement like that >> did that part of the settlement call for him to step down as an officer >> it did not. >> this is why the s.e.c. is out for blood. >> yes they were told in the morning yesterday that the settlement would be reached, then it wasn't then there apparently was some discussions that the s.e.c. would move ahead with this having said that, it's worth noting what this means to tesla shareholders there was an opportunity for them to put this behind them yesterday. >> which is the -- it would have gone away completely it would have made it difficult in challenging for shareholders to bring a suit against tesla, because the class action suit -- there would not have been an acceptance of guilt, which would have created an additional liability for the company. so this is really -- i've known

elon musk for a long time, i understand -- i know a lot of people say they don't understand it, i understand his sense of truth, he truly believes that he was doing the right thing. i appreciate that perspective, but at the same time i think it is almost impossible not to say this was a mistake at minimum what he did was a mistake. the other thing that's complicated about the situation, the standard for this particular case is not about his true intent that's not the standard. the standard is whether he was reckless and naivety, if you say he had meetings with these people and thought there would be a good chance it would happen, you can still say i made a mistake. i thought this would happen. >> the excuse many this makes him sound like you're an diot. >> now the company is in peril, mind you, spacex at some point in life you might imagine might want to become a public company. that creates a problem

there are going to be institutional investors that have wanted or that you would imagine he would have wanted to bring in to the boring company that i think that makes it more complicated. all of this complicates things it's interesting to see and try to understand how we got to this place. >> i also think this is a series of bad judgments, probably the best you can say about this. a series of bad judgments including the idea that at solarcity there were several s.e.c. investigations never made public to investors even when the company was being brought under the tesla wing there are a series of situations and you can look and say this is questionable judgment at best. the idea that he never admitted he made a mistake along the way. the best thing you can say about him at that point, that's a lack of judgment and naivety and idiocy >> there is evidence -- he e-mailed with the "wall street journal" a couple weeks ago and explained why he thought that funding was secured. talked about this idea that he plays the odds, when something

is more than 50% -- all of that just goes into this idea of at minimum you could say it was a mistake. others would say it's reckless forgetting about the intent, whether he was really trying to hurt the shorts or not let's take it on face value he didn't want to do that, if you believe that the other piece of it makes it difficult and complicated. >> there's so much here. first, you have an irresponsible statement from the board last evening. could we call them a board or a cartel they've been absence in this process. they added james murdoch in 2017 to be the adult in the room, where is james murdoch in all of this what is this board saying right now? the statement last night, it totally is irresponsible you're talking about a company that has $10 billion worth of debt, 2 f$2.2 billion worth of cash elon musk is able to go to wall street and raise capital when he needs to

he will be able to do that in this environment now i would say the answer to that is no. but again corporate governance, responsibility on the part of the board, it's absent >> i was going to ask you about the reaction in the stock. on the day he did the go private, wasn't it 420 >> no 420 was the 20% premium plus a dollar. >> that's what he was offering >> so it was going to open at 270, 150 points -- >> it was lower. >> down to 271 right now >> 310 yesterday >> but also the liability point on it, if shareholders want to bring a lawsuit and he ends up being -- and a court decides he was guilty in this case, this is still a civil case, we should say, the question then becomes when the shareholders sue, is it the delta between what the stock was when he sent the tweet and

when the blog post came out several hours later and, by the way, there was a lot of trading -- what was the move on that >> or do you have to wait four days until a second blog posts which describes the funding secured as clearly less secured. that blog post has a clear explanation. >> or go the next step and say the funding was never skecured and that was two weeks later >> there's a lot of movement here clearly had they been able to reach a settlement with the s.e.c., it would have created a much more complicated situation for shareholders, a much better situation, a better situation for the current shareholders >> he alone made this decision >> my understanding is that he alone made the decision. but i also understand the board plans to support him and continue to support him. >> that's the thing. >> they put out a ridiculous statement last evening he's the chief intelligence officer of tesla there's no doubt about that.

the institutional shareholder is there because of his so-called visionary beliefs. in terms of being a ceo, he has clearly exhibited that he does not have the capability to do that >> if you're a board, what's your fiduciary duty? if you see what the stock price does at the risk of losing elon musk, does that -- >> they're not a board >> that's the problem. here's the other question, if you're a shareholder, if his title became product officer, in a sort of martha stewart-esque way. >> that an officer title you can hold >> you cannot be the chief product officer, you can be product officer. if, in fact, he took a lesser title that wasn't considered an officer of the company, member of the board, so that you put a ceo there, and somebody else, do shareholders effectively say he's running the company and --

who is the adult in the room at that point who is the ceo is it someone elon musk is appointing and behind the scenes he will dictate what the policy will be for the company? or will be a real ceo that comes in and is running the company independently of elon musk >> his brother with the hat >> no. >> also on the board >> i've warned you you didn't listen to me about the hat. >> the brother's hat >> the hat there was questionable stuff going on with the whole family, andrew >> you know -- >> you made all these phone calls it was that simple >> you still defend the hat. >> i believe he's a remarkable visionary -- what about the flame thrower. i think that's been a mistake. there's been mistakes along the way, no question i wish there was some other individual that somehow elon

trusted who other people also trusted who could come in. without elon, tesla is a heavily indebted cash burning automaker. a lot of investors view it that way. if you lose elon, what does tesla become that's a big question. >> i have no knowledge of this but there's been intimations and a view in the tesla world that they're about to turn this corner and you will see these manufacturing numbers and sale numbers work in a way that all of a sudden the company becomes a self-fulfilling -- in a good way, though. all of this will become noise. the company just makes -- >> the s.e.c. doesn't care about that >> what do you make of the fact that the technological giants of northern california didn't come to his defense didn't come in, try to help him. >> they haven't liked him for a long time.

>> right what does that say about him and his ability again to raise capital if needed? >> those are competitors on some level. there's a lot of big egos out there. they haven't liked him for a long time. >> personally they may not like him, but to andrew's point, he has done some things -- >> they didn't like steve jobs either >> interestingly in the lawsuit or rather perhaps i'm thinking -- i've seen a series of different notes overnight, perhaps it was in one of the responses to a wells notice, there was a december krip sscrit google was one of the companies involved in discussions. he has been a long-time friend of larry page. but i was told that relationship had become more recent complicated in recent years as elon had publicly attacked google to some degree over their ai and that that created a separate level of friction there's a lot to talk about.

>> attacking facebook, different times he attacked a lot of them. not a lot of good blood. gene munster said last night this could be a path to a good thing for the company. >> of course >> if tesla actually reins him in and manages to keep him there, this could be a turning point. what do you think about that is it possible >> ultimately that's the outcome that tesla shareholders believe in and that they wanted. unfortunately the board has been unable to deliver that again from a corporate golf flans standpoi governance standpoint they should have done that given the reckless nature of his behavior and communications put out on twitter. yes, if you could specifically define his role and have boundaries for elon musk as a institutional shareholder, you could model the company as a technology company and find value in it. i agree with gene. that's the outcome but how do you get to that

point? i think people expect tremendous volatility in the stock. i don't know if i see that this is a stock that could trade between 2.50 and50 and 325 untie understanding and a resolution >> did you get it off your chest? >> good conversation >> i know. i want you to get everything -- >> we'll have more at the top of the 7:00, 8:00 -- >> you know we have nfl stuff, bob kraft, michael ruben coming on, managing partner of the celtics. the ryder cup is not here on my computer, but it is happening. >> it's on nbc i'm also away this is going to move the market. >> david feherty will be on. >> it's also the last day of pretty good quarter for the market >> something in washington

i don't know tesla's big. they got those cool electric cars it's elon musk, too. >> is grimes out or in >> grimes is out >> moves fast. >> things do >> i think fwrims h s hagrimes since the tweet. >> leslie, thank you very much we'll talk to you later this morning. let's talk portfolio strategy as the third quarter comes to an end. joining us is janell woodward for bmo fixed market welcome to the conversation. >> good morning. >> let's talk about what we've seen happening with yields it's been surprising since we heard from the fed yields coming back under pressure again what is the real catalyst behind that what kind of range do you think we're in for yields over the next 6 to 12 months? >> i think that's a great

question going into the fed meeting this week the expectation for an increase was wildly priced in what people were watching is what they would lay out from an expectation standpoint as we listened to jay powell's testimony and looked at the dot plot, it was consistent with expectations we could see an increase of the target and the curve move down we're eight increases in, two-thirds of the way through the cycle in three years, so we're a lot closer to that normal range we like yields in here we think they make sense for investors in a broader portfolio. >> joe, we're getting towards the end of the month, end of the quarter. it's been a strong one for stocks >> it's been a strong one for stocks specifically here in the u.s. there's a tailwind that comes from the fiscal policy initiatives we have embarked upon the rest of the world seems to be struggling. you have overnight news regarding what's going on in

italy. you go back to the emerging market story, emerging markets have underperformed tremendously now you make the decision for q4, do you believe there's going to be a recovery in the emergin markets or not i think there's small decisions for the markets. dispersion is finally coming back it's not all about technology. we're seeing other sectors begin to perform along with technology that's unique. >> you think that continues? you think that continues and we see other breakouts? >> we're seeing moderation in the strength of technology i think everyone is fine with technology going forward as a sector, but you're getting participation from some industrial names you're getting participation from energy, as energy prices once again -- think back a couple of years what was the problem? we had an earnings recession energy prices declined to $30, $40. now energy is back to 70, $75.

energy is participating. >> consumers are doing well. >> consumers are doing incredibly well. now you have a new sector added. this communications services sector you pulled alphabet, you pulled facebook into that new sector. that's taken portfolio managers that were overweight technology, they're now looking at the sector and realizing they're yun weight te underweight technology i expect in q4much of the same of what we've seen year to date. and it comes back to a decision you make on emerging market. for janel it boils down to high yield outperformed investment grade. that's an incredible component of your portfolio. do you want to look at investment grade and make additions there? >> what do you think >> that's the right question what's interesting is if we step back and look a year ago at

spreads, the pricing of credit risk, investment grade spreads are flat year over year and high-yield spreads have compressed there are also uncertainties still out there. we i had investment grade strikes that right balance you can get paid 4% to own investment grade corporates. that seems like the sweet spot in the market to us. >> thank you for joining us today. >> thank you very much >> joe will be with us for the rest of the hour. coming up, a busy morning in washington from a senate committee on the cabinet nomination and the house vote, we'll get you up to speed in a moment. here's a look at the biggest premarket winners and losers in the dow.

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house republicans are planning a vote on a 6$63 1 billion extension of individual tax cuts they're scheduled to expire after 2025 the bill is expected to pass in the house but republicans in the senate are not likely to tackle tax policy again before the midterm elections. some republicans are announcing this vote is about sening sendn election-year message to voters. >> politics in washington? >> not sure it will -- how many times did they repeal obamacare before they got in the majority or -- >> can't run election campaign ads if you don't do it 60 times they repealed it to make a statement then they finally get someone to sign it. oh, never mind

the senate judiciary committee will vote today on whether to recommend brett kavanaugh's confirmation to the supreme court after high drama on the hill yesterday. ylan mui has that story. >> reporter: 9:30 a.m. is when the committee will vote on whether brett kavanaugh should have a seat on the supreme court. right now it's unclear if he has the votes to get confirmed in the senate or even make it out of the committee undecided lawmakers include jeff flake, lisa murkowski and susan collins. coming out in support of kavanaugh last night was bob corker he was previously on the fence and joe manchin is weighing whether to cross the aisle and support judge kavanaugh as well. president trump tweeted last night that kavanaugh's testimony was powerful, honest and riveting and democrats are deploying a strategy of search and destroy. both kavanaugh and ford yesterday wereemotional

and sometimes tearful. >> this whole two-week effort has been a calculated and orchestrated political hit fueled with apparent pent-up anger about president trump and the 2016 election, fear that has been unfairly stoked about my judicial record, revenge on behalf of the clintons and millions of dollars in money from outside left-wing opposition groups. this is a circus >> for her part, ford said the alleged attack has left her with panic attacks, claustrophobya and ptsd >> indelible is the laughter the laughter between the two and they're having fun at my expense. >> guys this hearing definitely

laid bare some of the deep and bitter divides within our country right now. back over to you >> walk us through this. what happens today if they meet at 9:30, if there's a vote of the committee, if it passes that, how quickly are we talking about a vote coming to the full floor >> republican leadership is hopeful if it gets out of committee, they could bring this to the floor as early as next week, perhaps on tuesday they want to get this done before the midterms, they also want to give folks time to campaign on this during the month of october during the lead-up to the elections >> ylan mui, thank you very much when we come back, the governor of puerto rico will join us on set he is here to talk about hurricane recovery, the debt crisis and his push for statehood. that's next. right now as we head to break, a look at yesterday's s&p 500 winners and losers

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning, everybody. among the stories front and center today, shares of tesla tumbling on news that the s.e.c. is suing the company's ceo, elon musk for fraud sources tell cnbc that tesla expects to be sued as andrew reported, musk passed up an opportunity to settle, apparently it was a done deal?

>> it was a very close to done deal it was a no-admit, no-deny settlement in which case there would have been a financial penalty for elon musk and for the company, but it would have allowed the company to move on it would have made it much more complicated for shouldhow old o bring a class action suit, not that they couldn't, but not with a not guilty plea. but liability issues now hanging out over this. we should say this is not a criminal case, not yet at least. but there was an opportunity for this to move on. our understanding is that at the very last minute elon musk decided that he could not live with himself as being part of a settlement like this in part because for life you are never allowed to say you were not guilty no admit, no deny. you're not allowed a year or two later in an interview to say -- >> or in a tweet

>> say i didn't do this. you have to live with this settlement forever he is somebody who believes to his very core that his intent was correct. and that he believes this was not a police take. though, as we said over and over, the legal standard in this civil case is not that he has to have done this intending to defraud the market he could have simply been reckless the standard on reckless is much lower. >> let's back this up for a moment for people not following along. at issue are elon musk's tweets from back in august that he was considering taking the company private. musk calls the allegations unjusti unjustified. the s.e.c. is seeking to bar musk from serving as executive or director of a public company. they came out with guns blazing because they thought he had a done deal. >> they thought they had a done

deal and if a settlement could not be reached they would pursue the case the person leading this case is steven pichin, he was the lawyer who brought the case twice because there was first a mistrial against frank quattrone over e-mails and language in those e-mails. he's a competent, talented prosecutor he is someone who has taken these things as far as they can. so the question now is could you actually reach a settlement now that's better than where you were before? >> the s.e.c. complaint comes out and says not only do they not want him to be a company public director or officer but look, just because you're a celebrity or have a lot of technical expertise does not put you above the law. >> james stewart said this correctly last night when you go through the complaint, motive, motive, motive throughout.

and the speed with which this complaint came out is fascinating. this is not consistent with the way -- >> usually they take a longer time >> they read into whatevthat wh you may wish >> the other issue is what this does in terms of putting tesla in jeopardy long-term, but also spacex i believe spacex, a private company that at some point would have imagined would want to go public this makes that more complicated, raising money for boring and the employees who will get wrapped up in this situation. that's the sad part about where we are >> also the justice department he will have to deal with that as well. >> all right in our other headlines, netflix ceo reed hastings has announced a big bet on france. the company is planning on doubling its investments in the country and produce 14 local shows. in an interview with a french radio station, hastings did not

disclose how much the company would invest in france but said it was many millions of euros. hastings also said netflix plans to set up an office in paris. hbo is ending its 43-year relationship with the sport of boxing the company is shifting away from live events in favor of sports story telling in the last five years several major promoters and high-profile boxers left hbo for showtime and espn the final bout will air on october 27th look at the u.s. equity futures. been weakening a bit dow futures down by 51 points. nasdaq off by 19 the s&p down by close to 5. >> weird story >> boxing. >> yeah. >> there are huge rights costs to these things. they were always real events >> big events. >> i always thought these were profitable ventures. >> is that what is determining this >> the other issue is if you're in the content business, you want to use -- there's a lot of

capital that gets caught up in those boxing nights, those boxing evenings. one night of boxing, maybe you could shift to an entire series perhaps or something like that i don't know it's interesting >> i wonder if sports rights have gotten more and more expensive recently because of the must-see nature. >> i thought they were profitable enterprises >> i looked forward to some, though they play it up you know, before it happens, i'm not -- i haven't been following the guy's career at all, then i hear it's the biggest fight ever, we all get excited about it it comes on at 7:00, the fight comes on timely lfinally at 1:. and lasts usually four minutes >> i didn't realize the relationship was 43 years old.

>> stankkjohn stanky. >> i will sit with him in a week and a half we'll talk about this and more >> you were talking about france what else is happening with france >> yes >> something in italy going on >> what's going on in italy? >> banks >> i thought the ryder cup >> our next guest is on the front of lines of puerto rico's fight for statehood, we want to welcome puerto rico's governor, ricardo rossello give us a state of the state of where things stand post the storm an what's happened what'se we had a long recovery we had to battle a lot of bureaucracy. in the positive side i think long-term puerto rico is becoming a very exciting place to invest. we're going to have significant

amount of rebuild money, so that we don't just put back the old energy grid that was there, we put up a new energy grid we will be, i think, the most competitive jurisdiction in opportunity zones, which we can discuss over here as well that will bring investment. there's certain incentives in puerto rico that you won't find anywhere else in the united states people should keep an eye on that >> i want to talk about the investment issue in a moment, but because we've been talking about elon musk this morning you talked to him early on when he wanted to bring some of his battery technology to the country. what happened? >> several things happened i saw a tweet, and i just decided to answer. i told him, you know, look at puerto rico as a place where you can showcase your technology scales and that's when tesla sort of got interested in puerto rico after the storms they have done a lot of humanitarian work. most of it hasn't been publicized but they also submitted an

unsolicited proposal in our p3 structure for units to generate energy, about 200 megawatts to 300 megawatts. they're involved in the process. >> explain this. the president has rejected this idea of statehood. how much of that is an economic story, you thinkthink, in termsf how much liability the u.s. fwovment would tafwov me government would take on if you became a state >> puerto rico does have its issues fiscal issues, economic issues, so forth but we're dealing with them. we have a fiscal plan moving forward. we are title 3, which is sort of a chapter 9 type restructuring court. and the reality is that there is much added value to puerto rico becoming a state puerto rico, i see it as becoming the connector of the americas

we're part of the united states, but at the same time culturally we're connected to south and central america. geographically positioned, our labor force, while it's not as big, it's well trained there's many advantages to having puerto rico become a state. and i think that the biggest point is one about civil rights. how can we be in the united states preaching dempsey all over the world, yet you have 3 million disenfranchised u.s. citizens living on an island >> what do you think the inflection point could be in terms of public opinion in the united states? by the way, there are some dissenters in puerto rico on this issue as well >> yes this has been a centuries-old issue. but for the first time when people saw the aftermath of maria, people were wondering why is the recovery slower in puerto rico than in texas and in florida. prior to the storm public opinion polls showed that about

20% of u.s. citizens in the mainland knew that we were american citizens and part of the united states. after the storm, now that number is about 90-something percent. when they know we're part of the united states, when they know they're u.s. citizens, then they ask why is the treatment different? for us, even though it's been a challenge, now puerto rico is part of the mainstream conversation to me, that is the inflection point. what i ask all decisionmakers is to have a position you can't run away from this issue. that's what happened the last 100 years. people give us happy talk, they say they understand, they say they support self-determination, because when it comes time to take action, they don't do it. my call upon leaders and to anybody that comes over here is to say what is your position on puerto rico? do you support democratic rights do you support having the united states have colonial territories in the 21st century? or do you want to make a significant change i think that's going to tilt the

balance. >> what do you think >> i think he makes a great case i wasn't going to get into the whole politics of the issue, but we're trying to figure out exactly where something happened that -- the supply chain because i'm not -- did the federal government and fema live up to its promises was there a problem? we go back to katrina. we know there were local problems that hindered the federal response were there problems in puerto rico once the supplies got there where things broke down? where are we on that >> during the recovery, of course, and in the aftermath of what we believe is the most devastating event in the modern history of the united states, of course there were some events that broke down. it was challenging just consider puerto rico, they had no energy. they had no telecoms had no roads to connect. little water service so working from that was a new

world. but the truth of the matter is bureaucracy has hampered the recovery >> in puerto rico or fema bureaucracy? >> fema's bureaucracy. again, i like to be -- show evidence about these claims. i like to say what's been good and bad. the bad in terms of fema, there's been a level of bureaucracy on our island that was not imposed on texas and florida you can see the comparison and the recovery therefore has taken longer >> speak to one final issue, your mayor in san juan had some comments about the death toll after maria. of course president trump has disputed those numbers where do you land? >> i land on the side of science. before i became governor i was scientist. and what we did was we

externalized an investigation. gw took it it's a death toll estimate but it's a very good scientific process. so i support that. so much so that we took the 2,975 number as the official number but look, one last thing i have to say is all of these things have happened. now is the time really to invest in puerto rico opportunity zones, possibly 80 billion to 1$100 billion coming to puerto rico to rebuild, transformation of the energy grid, water, infrastructure in general. so everybody should look at puerto rico because in my view it is the most exciting place to invest right now >> governor, appreciate it thank you for coming in. >> thank you very much coming up, we'll take you -- we are we will take you live to france for an update on the ryder cup under way this morning david feherty will join us. in 9 nethe next hour we wil talk sports business with michael ruben, owner of the philadelphia sixers, a great

businessman. some of the biggest names in sports when we return. can i get some help. watch his head. ♪ i'm so happy. ♪ whatever they went through, they went through together. welcome guys. life well planned. see what a raymond james financial advisor can do for you. ♪ ♪ put your data to work on the cloud that drives business. the ibm cloud. the cloud for smarter business.

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welcome back italy's stock market is tumbling and bond yields there are rising this comes after italy set an

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the ryder cup teeing off this morning at le golf national outside of paris the biannual event pitting team usa versus europe. usa has not won on european soil in 20 years. joining us now golf analyst david feherty. this is distracting to me. do you have a monitor there? how are you taking time off to talk to us >> no, i don't have a monitor. the last i saw, the americans have a point on the board.

it's looking pretty good for this morning session >> you know, i have to ask you, why are you saying it's looking good when you're a former euro member i don't trust you to give me decent information you're like a traitor. you're not on my side. are you? >> you know, i'm kind of ab invidious position here. as a former european ryder cup play per but i've been an american since february of 2010 i pledged allegiance to the flag and anybody who fights underneath it. so i'm kind of a turned coat as far as the europeans are concerned. >> i remember politically aur good american after we talked. you're a good american i've got so many things to talk to you about the rough. i just watched patrick reed try to hit out of that stuff

it's like they haven't mowed it i don't think maybe in this century. >> yeah. there's some pretty -- you need to have a goat with you instead of a caddie. there's some thick stuff out there. joe, what no one really has mentioned so far as far as i can tell is that this european team are so familiar with this golf course this is the regular home with the french open. these guy have played this 150 times. i think the edge in talent goes to the americans the location, you know, that's a european thing >> and i saw the crowd at the first tee. i just can't even imagine that it looked like -- it almost looked like you're in a football stadium almost i don't know how many people there were but thousands. so is it set up for euros? that's what the rap is, feherty. maybe we do it over here too, but is it set up to favor the way european guys play

is that why they win when on european soil? >> yes thomas bjorn has an influence. he dictates how the course is set up until a week before the tournament then the tournament staff take over so it's set up, they feel, in favor of the europeans as well >> you know, i tried to get over there to be next to you. you know, i even appealed directly to lazarus. and he said rome in four years is my chance he did and i'm still waiting to be on your show. you've been on my show about six times. but it's fine. don't worry about it it's a one-way street and you seem to be comfortable with that which is fine. i do love watching your show you're hilarious we've known each other a long time and it's fine i haven't bb on your show >> you're very kind, joe >> i am. >> and you're welcome on my show any time >> i keep hearing that tell your producers. we'll see you, david it's going to be a great three plays.

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. a developing story this morning. the s.e.c. suing elon musk for allegedly misleading tweets about tesla's future what's next for mr. musk they don't know. the complete rundown of events that transpired and reaction from industry experts and andrew is coming up the final trading day of the quarter. we'll look where you should be putting your money to work and sports and business collide. michael ruben joins us and he's brought some great guests. brian rollop and the ceo and co-owner of the boston "squawk box. those interviews straight ahead as the second hour of "squawk box" begins right now. ♪

live from the beating heart of business, this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc i'm andrew ross sorkin along with becky quick and joe kernen. equity futures at this hour. dow looks it would open off 40 points and the nasdaq looking to open down about nine points news coming from italy where the italian government set a high budget that will prompt downgrades of italy's credit rating both with s&p and moody's to update in november. back in this country, the federal reserve's portfolio of its treasury and mortgage backed

securities has now dipped below $4 trillion. that $4 trillion mark, that's been the case for the first time in more than four years. of cutting back only purchases that began during the 2008 financial crisis we'll get the latest on personal income and spending in about 90 minutes. personal income rose 0.4% in august the s.e.c. is suing elon musk phil lebeau joins us now with his take on the whole story. hey, phil. >> hey, joe. this is a story that it played out yesterday afternoon. and what we're looking at now is the s.e.c. and elon musk heading to court at some point because they could not agree to a settlement which andrew and i know other outlets who have been reporting over the last 24 hours that they were close to a deal but in the end the s.e.c. has filed charges against elon musk saying, look he issued false and misleading

comments when he -- or statements when he sent out the tweet saying he had funding secured to take the company private at $420. the s.e.c. say that tweet caused market chaos and the s.e.c. wants to ban elon musk from serving as an officer at tesla we'll talk more about that in a little bit and why that would be problematic for many tesla investors. in a statement after the charges were filed, elon musk denied that this was the case here's the s.e.c. talking about elon musk issuing the tweet and their position about whether or not he should have done it. >> whether those statements are made in a press release or earnings call or through less formal methods such as twitter or other social media, neither celebrity status nor reputation is a technical innovator

>> in a statement after the charges were filed, elon musk said this unjustified action by the s.e.c. leaves me saddened and disappointed i have always taken action in transparency and truth for investors. the facts will show i never compromise this in any way a couple of hours after elon musk issued that statement, because remember he's been sued. not the company overall. the company and the board of directors issued a statement saying tesla and the board of directors are fully confident in elon, his integrity, leadership of the company which has resulted in the most successful u.s. auto company in over a century. our focus remains on the continued ramp of model 3 production and delivering for our customers and shareholders and employees. we get the third quarter numbers some time next week. likely on monday or tuesday. that's when tesla is expected to report the deliveries and the production rate for the third quarters and increasingly you hear analysts saying they're

optimistic about those numbers i mentioned the issue of whether or not elon musk is banned from being an officer at tesla. jpmorgan out with a note today saying essentially for investor confidence, elon musk needs to be part of this company in some fashion. so as this plays out and and rue i know you did some reporting on this earlier today whether or not he stays at this company is going to be krital to what we see happening with this stock. >> two points to make and i know we mentioned earlier that tesla was not sued in this case. interestingly enough, the settlement that was being prepared yesterday morning which musk ultimately rejected at the last minute ahead of all this and the suit being brought was a settlement with both musk and tesla. a financial penalty only with a no admit, no deny across the board. in fact, the expectation yesterday, my understanding, was that tesla was going to be a suit as well although clearly they have not

been i do not know whether that means they cannot be in the future that's something to think about and to consider. the other element of this that i'm curious about from your standpoint given the jpmorgan note this morning is whether elon musk being at the company without what might be described as an officer title call him the creative director, the product designer, something of that sort but not clearly a member of the board or at least in name the ceo whether investors would be placated by that or not. >> i think they would to a certain extent depending how much influence they believe he would have at the company. in other words, is it going to be a case of where he's not ceo but wink wink we know who really calls the shots around here. if that were the case, if people were fairly confident that elon musk was still steering the ship, so to speak, i believe that would reinforce confidence. >> i imagine the s.e.c. -- >> that was going to be my first question would they go along with it.

stay right there we've got a couple of other voices we want to add to the conversation bob lutz is the former gm and vice chair and cnbc contributor. also carrie actio axle. carrie, let's start be you as a former s.e.c. i shall looking at this, the scenario looking at this, if musk were to say i'm chief product officer and wink wink i'm still in charge, is that something that the s.e.c. would allow in a situation like this? >> well, they're asking for an officer and director bar which means he could not been an officer in any respect in a court proceeding, the court could decide whether that's a permanent bar for a limited period of time in any event, he couldn't be an officer in any way whether they would allow him to proceed in some other way like a research adviser or something,

i'm not sure i mean, ultimately it comes down to what the settlement is or the release is >> having heard what andrew's been reporting out, that there was a settlement ready to go yesterday morning. that musk balked at that that he didn't want to sign something that would not allow him to deny guilt down the road. what happens at this point with the s.e.c. they came out with both guns blazing in this complaint and what they've laid out against him. >> i agree wholeheartedly. they did come out with both guns blazing. at this point, though, the s.e.c. action won't move very quickly. it's a civil lawsuit so he will have time to respond to it. there would be a period of discovery. it's kind of a hurry up and wait scenario the other shoe could drop if we saw criminal indictment. that would move much quicker >> just in terms of reading the tea leaves, this was filed in the southern district of new

york what you would have assumed would have been filed in san francisco. >> exactly right i would have assumed it would be filed in san francisco it looks like there's probably a parallel investigation where the southern district of new york with the leading fraud prosecutors in the country is probably taking the lead in this case i can't think of another reason to file in new york where you have people in san francisco from the s.e.c. investigating the securities fraud charges there. >> i want to get to bob, but i have one quick question to keri which is in the complaint what you don't see are e-mails, texts, or other things that would demonstrate -- i mean, there's an effort to show demonstration of intent. but there are no e-mails or texts at least in the hours after the tweet went out saying i got the shorts or man, i did this, or whatever -- something in a smoking gun-ish way is that because they haven't collected all of the material at

this point would have they -- i guess the question is, if that existed, wouldn't that have been in the complaint or that's still something they could find in discovery? >> andrew, i also thought that was very thin, that complaint. i would have expected more facts in there and that does imply they've rushed this case along i don't think they've talked to everybody who would be a witness in this case >> okay. >> all right, bob. let's talk through what you think the state of the company is right now we should point out you're somebody who has been a longtime critic of this >> i've been a longtime realist. the fact is they may call themselves wildly successful but they've never earned a profit and burn through other people's money. they are very short of cash again with huge debt repayments coming up early next year. and the real problem with this s.e.c. regulation and the reason

elon and the company should take any deal that's offered them, is while you are under s.e.c. investigation for fraud or violation of rules, but while under investigation you can't raise money. the s.e.c. simply will not permit it. so they're facing a situation where another capital raise is going to be imminent because they are running out of cash and the street consensus are that the third quarter in you remembers are not going to be as good as hoped and possibly even negative. so still burning cash. going to have to raise capital and can't raise capital. and there is a huge dilemma for the company. because without fresh cash, they're not going to make it >> that's a really interesting point. keri, when you see something like this has happened, is there a chance for a deal to come back to the s.e.c.? >> there's always a chance

the s.e.c. likes deals >> so you don't look at this as you had this one opportunity clearly there was a decision yesterday morning not to take it by understanding was everybody was planning to put out statements, in fact, that would have indicated, that was in agreement to what had been agreed to. then this pulled bab eed back ae last minute. then they proceeded with this announcement you're saying you could actually go back. and the question is what could you go back for? >> well, we don't know yet exactly what the terms were that were rejected. >> let me put those on the table, because i did report on this earlier this morning. this was a no-admit, no-deny settlement, financial penalties only both for musk and for the company. >> and you believe there was no officer director in that settlement also? >> correct.

>> because that strikes me as the deal breaker from musk whenever you're talking about ruining somebody's career, that kind of case often goes to trial. if the s.e.c. is often to agree to something less, it's likely solvable he might not be willing to agree to anything reasonable >> bob, what do you think about the board? last night they put out a statement of support, unqualified support basically for elon musk. >> well, i think that board is not quite like other public company boards i think there's a lot of people on there that were selected by elon musk, related to e long musk, personal friends of elon musk it's not like other boards with independent directors. i'm not surprised with that statement. part of the statement of the board, what most successful car company in the last how many years -- >> i wonder about that too >> that's a joke they make some nice cars >> yeah. cool electric cars >> nothing wrong with the

automobiles. they're fine but the business is an unmitigated disaster and always has been loses on every car draining cash. always going back for fresh money. can't get a production apparatus going. now he can't get the logistics going. it claims he has no car carriers other car companies have no problem obtaining car carriers here's one thing that's biting him. see, other car companies, the minute that car goes out the factory door, you bill the dealer the dealer has 60 days to pay. but elon musk has no dealers he has factory stores. so when the car goes out the door, he doesn't get any money the way another car company does he has to wait until that vehicle is shipped to a dealer and then actually handed to a customer that -- he doesn't get paid until the ultimate transaction

so there's another huge disadvantage of this scheme of not having franchise dealers quite aside from the fact it ties up enormous amounts of capital. that's one of the reasons tesla has a tough time being profitable is because of their unique factory owned distribution structure so the whole company is one disastrous mess. and if i were that board, i would thank elon for a job well done, keep him visible in some place, and then get professional management for the company which is something they badly need no question elon is a genius creator, a dreamer the world needs people like that the trouble is they usually can't run things very well >> hey, bob want to thank you you for joining us

also want to thank keri curtis ax axel and phil, we'll check in with phil lebeau later this morning too. >> i was going to actually ask phil about that. that's where we heard it what is it the most successful car company in the last century? >> that's what he said he made the point it's one of only two car companies that's never gone into bankruptcy yet. >> right but the other ones have had annual profits occasionally. oh, my god you know what i mean, phil yeah i don't know i mean, i just -- i heard it and i was going to ask you about it. then i didn't have to because lutz said it. >> well, what's your -- i'll answer your question then i have a piece of news here first of all, let me answer your question most successful car company in over a century are they the only u.s. car company that has started up let's say in the last century really since you had general motors cobble together a number

of different automake esrs and a in business? yes, they have been able to do that there are others who started up and then ultimately failed that's their measure of success. as bob lutz rightly points out, they're not profitable so if your measure of success is are you a profitable country, then this, nobody's going to agree to that. citi is out with a note today. the reason i'm bringing this up, we'll see it from all analysts they're moving tesla to a sell rating saying the s.e.c. action raises the risk of a spiral. the risk/reward moves them to put the stock at a sell rating and i think they moved their price target down in the $275 range. >> it's where the stock already is >> i think we'll see this from every analyst. i would be surprised if you see any analyst out there saying, yeah okay we'll stick with our buy rating at least in the near term.

now you have this cloud hanging over the stock >> the one thing bob said i hadn't realized before is a company can't raise capital. the s.e.c. enforcement official we were talking to said that this is going to be a very slow case from here it's happened very quickly to this point but that this will be a slow and meticulous process which makes you wonder how long that sort of cloud can last >> they have two debt payments coming up. they've got the cash for the first small one. then they have a bigger one beginning of next year then you have to keep pumping money into expanding >> the dude. jeff bridges' company. >> it was. >> didn't work out how could it not anyway, thank you, phil lebeau >> you bet coming up when we return, our guest host is the executive chairman of fanatics he's brought some business partners along with him this

morning from the nfl chief media and business officer of the league is going to join us we'll talk to them after the break. talk media deals, e-commerce, and more bob kraft will be here in the 8:00 hour. we're back in a moment

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welcome back to "squawk box. nfl's week four kicking off. the first game of the season to stream on amazon prime joining us now is the chief media and business officer for the league and our guest host is michael ruben. good morning to you. >> good morning. >> first female team anchoring >> that's right. very proud of that they're great. >> was that something that amazon does? is that something that the league talks to amazon about >> yeah both it was something -- when we did the original football deal with amazon and decided we were going to stream this thing, we're always encouraging them to figure out new things to do. take advantage of the media. just don't put television on the internet alternative audio was one of them they said how about these two alternative announcers we thought they were great >> how do yo measure success

with the streaming you get the nielsen ratings on the linear broadcast does amazon provide numbers? >> they do >> they do >> yeah. >> what can you tell us? >> it's public this is not the first time we've done it with them. they usually get on average anywhere a half a million watching them. so it's incremental consumption which is good. the quality's got to be high -- >> of the broadcast. >> of the broadcast. that's what you really need. >> is the standard being what nbc does, of course. >> look, broadcasters in general. everybody in this country -- >> just throwing something in for the family >> they are very good. but i think it's just the high quality to stream. you have a high expectation on a big screen of a high definition stream, you need that on the internet that's sort of job number one. job number two is to make sure that the experience is

interactive. they broadcast it on twitch as well which is more interactive. >> here's my long-term question. we're all going to be looking db we're on 2018 almost '19 2022 becomes the big moment where these linear packages coming up. you guys have always been about reaching the broadest group. so you think there will be an inflection point in terms of the digital consumption where an ott player like a youtube or somebody in that category, netflix, could come to you and you say we can capture if not as many or more ie balls. it would be sufficient for sponsors that one of the big packages, the monday night football kind of thing, that would run as an ott product? >> i think it's possible i mean, i think you use the word inflection point i think we're there. you see every year fewer and

fewer people watching television now, i don't think television is going away for the nfl it's always going to be an important part of the distribution strategy. >> meaning you would not take it off the broadcast. >> i think -- look depending what you think on what paid tv is going to happen in this country, right? is it going to be 80 million homes? 75 million homes i don't know but it's not going to be zero. there's still plenty of people who want to get their big event content over television. and we still do that on cable tv today, becky so if you're watching a game on espn or nfl network, it is still over the air in the local teams that play. if new york is playing cleveland, you'll see that over the air in new york and cleveland. so television is still important, but you see the same numbers you guys talk about that we see especially we the younger demographic, more and more of their time is spent streaming. >> the super bowl is not going to be broadcasting ott any time soon >> we've talked about this before we'll have 118 million people at

one given time watching the super bowl i've seen nothing on the internet that can sustain 118 million concurrent users i don't think it works >> make a prediction so sports overall five years out, who are going to be the big people doing the games traditional guys so andrew can keep making plugs for nbc? or overall >> i think you already see silicon valley in the sports business right? amazon is carrying our product facebook is carrying major league baseball games. >> who will be the bigger ones long-term? >> we'll see >> you've got to not alienate your customers i try to think of my parents watching on a streaming device it's never going to happen >> we're in the business of getting as many people as we can for as long as we can. >> he's watching the ryder cup right now. talk about alienating customers. i'm curious if you could tell us you woke up probably two weeks ago and saw a headline that nike had made a deal with kaepernick,

was going to run ads, going to make shoes it's very possible that nfl players are now going to wear these shoes on the field what did you think when you first saw that headline? >> well, kaepernick's been with nike for a long time so that's not a surprise look i think -- >> but it creates a whole new question >> i'll be the first to say, i thought it was great i saw it middle of the day sunday, i thought it was amazing. >> it takes the onus off the nfl to deal with it. >> look. we've talked about issues with my friend meek mill. you want them to use their platforms. i think nike is behindcapper innic. these are important issues he raises so i thought it was incredible we looked at it as great for everybody. >> the nfl which is a partner of clearly nike's and kaepernick to some degree represents something that the nfl has tried to at

least shift which is they don't want players kneeling on the field. you could argue some of the players could wear his shoes as a alternative to that to suggest that they are with him and what does that say or do >> we've been consistent about this we think that the issues that our players want to talk about are important issues we encourage them to do that i think we are fortunate to have the players wie have they are wonderful young men who care about the community and are using their platform to discuss issues that's a good thing. nike's been about that for years. >> do you think there's a changing of the guard? it's early in the season i'm seeing weird things. i mean, kraft's on later they're 1-2. when's the last time they were 1-2? >> couple years ago they started -- >> okay. fine but do you see -- when you think about who maybe some of the great teams are this year,

they're not your normal -- seems like they're different you're hoping for that -- >> look at our business. our nfl business this year, we're up 34% for the year, 50% last weekend why? because there's great change in the sport every year that's why fans love the sport >> seems like more this year >> 14 out of the last 15 years we had at least one team and usually more that go from last in their division to the playoffs last year we had eight teams in the playoffs who didn't make the playoffs the year before >> so it's not new >> the cleveland browns. okay >> they look pretty good >> the cleveland browns after mayfield had his game, we will 40x the volume that's how rabid nfl fans are. >> all right i was -- you know, the bengals i'm afraid to say anything about them then they will start losing.

>> we'll have to run, but i want to get brian on this we can talk to michael about this later gambling sports and gambling. people talk about how it's going to engage the fan. >> our priority first and foremost, what we have to worry about is maintaining integrity of the game 37 -- >> meaning you're worried that people are going to speculate the game is getting thrown or there's inside information about players being injured or other things >> that's the last thing we want we want to make sure the integrity of the game -- nobody will enjoy the game if they think it's not full of integrity. we care about consumer protection we carry that as our fans are actually going to be protected in this.

we care about intellectual property if it's right at the federal and state level, then you'll have this big illegal market that will transfer to legal there will be consumption. >> great to see you. >> always great to see you >> michael joining us for the rest of the show still to come, we're going to talk about tariffs and real estate how is the trade war affecting development prices and commercial construction? that is straight ahead "squawk box" will be right back. broke my personal record. aflac!? no-good break. gooood break. i'm so sorry we can't make your barbecue. i'm just sick about it. aflac!? different kind of sick. if i can't work after surgery, how am i gonna pay my rent? all these bills?

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to helping your company reach its goals. u.s. bank -- the power of possible. welcome back to "squawk box. the focus is on real estate and the impact of tariffs. diana olick joins us this morning. >> the s&p real estate sector is barely two years old still just a baby and having

some growing pains this sekctor is made up of reits great in a low interest rate environment when investors are separate for yield, but not when rates are rising which of course they are now compared to a year ago, the s&p is up over 16% the real estate sector, up barely over 1% not as bad as consumers staples and communications the real estate sector is hit with tariffs all kinds of goods that go into commercial construction. let's zero in on timber reit warehouser china put 25% tariff on pine log exports. analysts say that will create near term choppiness as the impact is looked at.

as an important component of its strategy some argue that despite the increase in term costs, u.s. reits are relatively immune to trade wars and a great hedge against inflation. back to you guys >> thank you when we come back, a lot more to come kwoo we're going to talk markets. take a look at u.s. equity futures right now. dow looks it would open off 75 points right now nasdaq off about 29 points back in a moment need a change of scenery? kayak compares hundreds of travel and airline sites so you can be confident you're getting the right flight at the best price. cheers! kayak. search one and done. air velocity is reading at fifteen fpm. why would you need to learn every detail about a company?

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welcome back to "squawk box. let's talk markets joining us islevitz and jim paulsen. we do a mini-lookback here at the end of the quarter big quarter. i didn't feel your bullishness for this last quarter. you haven't been as bullish as you have been in recent years. are we at a point now where it makes no sense it makes no sense to you, but should it not make sense to other players? >>. >> i think you want to be conservative

you're right i certainly didn't think we'd have the quarter we just had it could continue, joe but i think the risk and the downside is starting to become more than the potential upside from here. and i would not necessarily exit, but i'd get more defensive on how i'm positioned. and moving more towards defensive sectors overall. >> if you're already out, should we be listening to you you can't get out when you're already out, can you >> we're still in. but we've certainly moved more defensively. i do think if this bull's going to continue, it needs another healthy correction first >> are you worried about rates, inflation, or both what's your problem? >> i think that's -- you just put on a great list. and the problem isn't any one

issue. it's the multitude of issues it's high values it's rising yields, rising inflation. i think there's going to be a slowdown in the economy that will force downward revision of earnings estimates, for example. so it's not one thing. it's just a number of things that i -- and i think those pressures will continue because now we're at full employment as long as this recovery continues. >> it's killing you these private sector growth things are working out. you know, you're pulling your hair out levitz i think might have similar views. last time i talked to brian about whether the dollar, indeed, does weaken from the higher deficits. i think you thought the economy would slow as well but your piece today you're saying perma-bears are on the wrong end of things. >> the perma-bears always sound smarter. but it's the bulls -- >> are you bullish now

>> i am. i've been bullish for years. i'm going to be bullish until we see an inverted yield coming we're seeing productivity pick up in the united states. not meaningfully, but slowly going up yeah, tight labor mark yeah, wages going up some. but that's a good sign i agree that the economy may slow into 2019 we've had a little bit of a stronger dollar. we've had a couple of interest rate hikes, but in my opinion that means we continue to look for growth wherever we can find it a lot of that is going to be in good companies but some of that is going to be outside the united states. you know, valuations get cheaper in places. >> still worried about the dollar >> i worry about the dollar -- >> i mean weakening. >> i actually think a weakening dollar would be beneficial at this point in the cycle. where i worry about the dollar is if we go too far in trade

wars and too far in fed tightening that we have a flight to u.s. dollar and we slow down the economy and we slow down the earnings of multi-national companies. >> a battle of the hipster beards between you and paulsen if we get a two shot of these two guys michael -- >> as least you can see brian's. >> never struck you to do this, mike you're a basketball owner. you're fashionable you ever try it? >> you know, i stick to what i'm good at. and the beard is not it makes me look older i'm trying to be youthful. >> i tried >> andrew with a -- >> i think that'd be bad ass >> i want to see that. >> i sent becky a picture of it once >> do you look older or not? >> i look terrible >> beard with the musk brother hat is what i'm thinking you know what i mean oh, they're working on it. i just heard they're working on it they love doing stuff. especially on fridays. brian, thank you >> it's actually a good picture. >> paulsen, thank you.

we'll see. we'll have you back. you know, we're going to remember what you said so maybe you don't want to come back no we want to see you thanks >> we'll see how it works out. >> all right see you. when we come back -- how did you get him to come? >> how did i get brian to come >> no. you see who's coming up? >> robert? >> wick. how did you get wick to come >> enemies on the court. off the court, nothing but love. >> co-owner of the "squawk box" is going to jo u ♪

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the 76ers. this isn't like, you know, politics you guys can still be friends and compete on the court >> we can be friends >> during the playoffs this year, wyc sat me next to him he looked at me and said we're never next to each other again moved to a different seat, and they won the game. >> you guys were winning in philly and you released the c confetti early or your people did. then we came back. i've got pieces of con fete fee from that game that i carry in my wallet. >> i see they're all over your house now. you've got this confetti every dog has their day. >> this is the thing about team ownership. you got to do it for the right reasons. you got to do it to have fun and try to compete if you do it for money, it fails. if you do it for love and pride, it works >> we talked about the nfl, there's always changing -- you know, teams get good

is there going to be a different dynamic this year? >> we're trying to be good this year we've been good, we've been bad -- >> we like you better bad, by the way. >> do you think the 76ers are going to be good this year >> i think they're going to be just about the same as last year which was very good. >> and the "squawk box" is going to be a great team there is change in the nba one thing wyc and i agree with is having lebron out of the east it's also great for the nba. what's your perspective on the lebron effect to the nba in l.a. >> i've known him since the day -- somewhat, slightly -- since the day he came into the league he's been great for the league he's a person of character and obviously, you know, a guy in every way who has taken this league to another level. he's never worn green. i wish he had, but he's out west and we're going to do our best to get through the east without him.

>> and it's been amazing from a sales perspective. i was just looking recently. when he signed with the lakers, the amount of jerseys we sold immediately based on the kind of business is incredible >> you're not talking about sixers you're talking about fanatics at this point >> yeah. fanatics selling lebron jerseys, i think it was one of the biggest jerseys sold in the history of the league. >> did you sell 23s? because he's wearing 6 now >> we encourage him to change numbers every season >> it's a good business. >> thank you absolutely. >> that would have been funny if the sixers jerseys were going off the shelves. >> there was actually a video that our team sent us of us making the lebron jerseys. they said you should post this on instagram i said this is too painful the day after he announced going to the lakers. certainly many teams were fighting to have lebron. i couldn't bring myself to post

the video. >> how you can wear whatever color sneakers you want? >> yeah. >> are players going to wear pink sneakers? >> they already do >> yeah. but that's like a breast cancer awareness day. there's difference -- >> it's gotten loose over the last couple years. i'll say this. the league, we partner with the players. the team ownership, the fans, the league office, it really kind of is -- it's more knit together than other sports we're kind of more on other pages. and the guys get the revenue from the sneakers. kyrie's on our team. he's got some amazing sneakers he gave me a pair that's purple on one side and yellow on the other. i mean, it's just crazy what they have. and it's stylish the fba is going forward, not backward >> okay. i may have some streaming here, perhaps, since it's an nbc product. is that how i'm going to be watching hoops eventual will i >> yeah.

we're streaming at the "squawk box" arou-- celtics, we have a comcast partnership in boston. that's how -- basketball is a good game for the small screen big guys brightly lit indoors, two hours, it works. >> in general, we asked brian the question our last guest i believe when we look five, ten years from now, you're going to see streaming and in general the technology guys be a big part of the sports media rights. i just think tradition broadcast guys are important people aren't going to stop watching television, but we want to reach as many fans as we can. so for me, i watch the games ond on my phone all the time if i'm not at a game, i'm on my phone for the first vehicle for me. >> in your helicopter. >> if you do this for money the fans figure it out

but if you're doing it for fun, the money follows. it is a profitable business. >> it is it's profitable for everybody. players, sponsors, team ownership. it's all working but i think it's -- the "squawk box" -- celtics, it's big. >> wyc grousbeck, thank you. >> i had a hybrid bmw. i've moved on. >> all right michael will stay with us. when we come back, we have much more on the big news of tesla and elon musk and the s.e.c. we'll be right back. hi, kids! i'm carl and i'm a broker. do you offer $4.95 online equity trades? great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service

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and purchase a new samsung phone. visit your local xfinity store today. let's take a look at some stocks to watch thork. advertising stocks are under pressure federal prosecutors are opening a probe into media buying practices in the advertising industry oh, we're doing pops and drops that's exciting. and tilray continues it's up about 4% stock has moved 10% or more either up or down in 9 of the past 13 trading days >> has he played "friday i'm in love". >> yeah. he already did no, we don't need to hear it

again. we have andrew in that hat yet with the beard >> i don't need the hat. nor the beard. okay coming up when we return, elon musk calling the s.e.c. fraud lawsuit unjustified. more on this developing story when we return so much to talk about. tesla's stock already down big this morning ad'll talk about where it's heed later, bob kraft back in a moment at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today. you mighyour joints...ng95. for your heart... or your digestion...

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tesla ceo elon musk accused of fraud by the s.e.c. the stock is plummeting. more details straight ahead. a "squawk" sports triple play we'll talk with michael rubin, one of the owners of the 76ers and bob kraft, owner of the new england patriots and we'll give you a look at the ryder cup leaderboard. plus pizza hut has replaced papa john's as the official sponsor of the nfl the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box.

>> good morning. welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross sorkin our guest host is michael rubin of fanatics and owner of the 76ers. it's starting. i'm excited. >> we're going to china. you told us you're not going to cheat on us with any other teams. golf doesn't matter. you're a die hard sixers fans. >> yes, yes. >> we've got tape. >> yes, yes. >> say it affirmative. >> yes, yes! and yes! >> he can't go back on his word now. >> just by saying yes. >> say i am a die hard fixers fans. >> in the control room they're saying do not root for the sixers every team joe likes loses >> honestly, it's a valid point.

i knew that about joe. >> did you need a win when i came down? >> i did but becky's raising important points i may need to think through the strategy >> it may not work >> you came through very strong. >> and i wasn't there at the next one >> right >> we're going to have to think through this very carefully. >> i'm worried about that guy i di i'm an xavier fan. >> i just worry every game because that's what most people do in sports whether you're a fan or owner, you're naturally nervous until you get the "w." >> you're nervous up 20 with like two minutes left. >> two minutes i feel secure phi minu five minutes, i don't. >> it's not over until it's over, someone once said. and the futures, it's hard to

predict things especially about the futures. anyway market is down 87 points this morning. i predict it's probably going to open down. and the nasdaq down 33 and the s&p is down about 8. this is the last trading day of what has been a big quarter for equities lots of records set across the board. now even the dow pitching in let's talk about the stories investors are going to be talking about this morning google's ceo is heading to capitol hill today among the topics that are expected to be on the docket, privacy and political bias google was criticized earlier this month for not sending a representative to a congressional hearing on privacy. struggling retailer jcpenney has lost a key executive chief financial officer jeffrey davis is resigning after less than a year on the job to pursue another opportunity. this is coming just before that all-important holiday season he is the third top executive to leave the company this year.

ceo marvin ellison and joe macfarland both left to join lowe's and we'll get the latest data on personal income and spending our top business story of the morning. the s.e.c. taking aim at tesla founder and ceo elon musk over a tweet. and zaifd fabi david faber join. so much to talk about and unpack here >> of course you've been reporting on the fact that there were those settlement talks between the company, musk, and the s.e.c. and we have a bit more detail on just how close they came i think you've referenced, as well, that they were expecting that a settlement would have been what was announced yesterday. not the charges from the s.e.c. against mr. musk but we can give you more details as what was offered, what apparently was thought to have been close to agreed to, and why

musk walked away there it is. it would have requires musk to neither admit nor deny culpability. it would have barred him as chairman for two years he would have received a fine and company, of course, tesla would have also paid a fine. and the s.e.c. apparently was also requiring the company to add two new independent directors to its board shareholders may see that and go, why wouldn't you take that deal musk could have stayed on as ceo, paid the fines, added the independent directors, and moved on but apparently from what i understand, he felt that he was so in the right here that his inability to deny having done this was something he simply could not aseed to and so that is why those talks failed to produce an agreement and resulted, of course, in mr.

musk being charged not the company which as we've also sort of indicated was an expectation until the complaints came out or the complaint came out. and it did not include the company. that would have been a violation, i think a 13-515 violation saying you're responsible for the actions of your employees they didn't go there they did go after musk i'm curious what your thoughts are. he turned down a settlement conceivably that a lot of shareholders probably would have been happy with. >> and that's what we've been talking about all morning. because it clearly puts the company in jeopardy. by the way, also potentially puts the employees and investors not only of tesla but of spacex, the extent they had ambitions to be a publicly traded company if he were found guilty, that makes that more complicated. i mean, this is sort of much more -- there's the tesla story. it becomes much more widespread.

and as you reported and as we reported this morning, this idea of a no-admit, no-deny with very little, rarely a financial penalty taking a step back almost cosmetic changes to the company. you would think the board from a fiduciary responsibility would have been to take a deal like that having said that, i think we now both reported there was at least a thinking that elon musk expressed according to sources at least that i spoke to that he could not abide by the idea he would never be able to deny what took place and specifically this idea that it went to his integrity and intent though we should also say the standard in this particular instance has nothing to do with intent that's one component of it, but the other component is you can be found guilty, in fact, by being reckless

which can be considered a mistake. that's the other piece of it it's a much lower bar. the question i have is whether it would ever be an opportunity to come back -- to settle on similar terms again or whether the s.e.c. would draw a line in the sand i would imagine there's going to be a lot of pressure from test shareholders to try to get to that table >> yeah. and i don't know the answer to that one of the people brings this case having been involved in sullivan cromwell, he might know not sure he's going to take my call, but we can give it a shot. you mentioned regularlessness and the staff's focusness on reckle recklessness some would say this is reckless not to have taken the settlement come on. you can't be chairman for two years and add a couple independent directors and pay a

fine and not deny it but that's it. yeah so we'll see how this develops and certainly how the stock performs today but i think it is interesting in light of of course of what you've been reporting. some of the other details we know here, how sharlz are going to react to that decision. >> and bob lutz made the point to becky -- >> that's the point i was going to get to, yeah. >> just the idea it's very challenging if not impossible to raise money during a case that's stillgoing like this that could complicate to the point they need a raise. this will put more focus on numbers and ability to perform as a company of course their record of meeting those numbers to be polite about it has not always lived up to the hype so there's going to be -- >> no, it hasn't we understand the pressure mr. musk has been on in recent months or at least seemingly so in terms of his behavior

one would imagine one ratchets that up to a certain extent. adds yet another potential risk factors. >> i have incredible respect for him as an entrepreneur i ran a public company i run private companies today. the responsibility you have as a ceo of a public company is of a much higher bar. when you think about just listening to all of this, all the distraction that's going to be going on around it, it's so unproductive and the government is a vicious adversary. to kind of take on the government and kind of say, you know, something's reasonable, i think it's tough i know if i were in his position, i definitely would have said let's move on, put it behind us and built a great company. i commend someone for standing in what they believe in, but this is going to be a mess around him for awhile. >> by the way, these are unforced errors. it seems he's his own worst enemy. >> i can say things today as the owner of fanatics or rulala, it

doesn't matter you're held to a higher standard that's what you get when you sign up for money from public markets. >> a relation to mark cuban case and this >> i think it's different. >> i think it's very different he was doing that on his own volition this was a specific attack on his own integrity and was not about a publicly traded company. and there's the other issue which we discussed in the last hour, the liability this creates. meaning the settlement would have made it much more challenging for family members to bring a class action against. >> this is going to be such a distraction around his company versus how do we move forward -- >> there's the question of will there be a doj issue that comes along with it. and the former s.e.c. enforcement official we spoke

with earlier today, an attorney from that said because they filed it in the southern district of new york rather than san francisco, that would seem to be an indication -- >> listening to this, i kind of felt like, wow you're just giving the middle finger to, you know, the government saying let's go to war. i think going to war with the government is not something you want to take on lls you have to. at minimum look he could have said that was a mistake. i shouldn't have done it >> it's good to say we screwed this up and let's move forward by the way, i sit here as an entrepreneur with huge respect for him. >> let's put you on the board for a moment what would you do? >> first of all, i would never want to be on anybody's board other than our own but if i was, i would be strongly encouraging him to get this worked out.

i understand that this is, you know, you don't like this and it doesn't feel right but all these employees count on you. you know, all these consumers count on you we need to focus our energy on building an incredible business not on fighting with the government because fighting with the government is very stradistract. >> i would imagine that conversation already happened. >> so you try to encourage more and more he's a great entrepreneur. great entrepreneurs do what they believe in he could find two great directors. build a better business. >> all right >> all right michael rubin is our head coach. we've got more with him. >> david, great reporting. >> sure. happy to be here i thought the independent directors thing was weird. i don't remember the s.e.c. requiring two independent directors. >> but it wasn't a complicated ask either keep it real if they offer you things that

are reasonable, take it and move on >> we didn't see you yesterday, but happy 25 years >> thank you i've begun the next 25 now >> countdown is under way. he'll have more on "squawk on the street." when we come back, pizza hut on the bench replacing papa john's as an nfl sponsor. also live with bob kraft he will join us as week four of the season kicks off stay tuned you are watching "squawk box" right here on cnbc

welcome back as the nfl kicks off its fourth week of the season, pizza hut is expecting increased visibility alongside the players. joining us is pizza hut's u.s. president. artie, thanks for being here today. >> real pleasure >> tell us the story what happened it was a quick turnaround as you swooped in and took this sponsorship. what happened? it was less than 24 hours,

right? >> we're in the business of moving quickly being in the delivery business, certainly but the nfl is an amazing brand. pizza hut, our team members couldn't be excited. we have 150,000 team members everybody walked taller. our brand sentiment is up and the partnership couldn't be better >> could you really see it in the numbers? >> we can. certainly on social media and the brand sentiment scores we've seen a significant uptick. >> does it show up also in sales during nfl games >> i can't comment on intra-quarter sales, certainly, but when we run an ad our ordering picks up. the nfl is a big part of pizza category >> you're not disappointed >> we're not disappointed. >> we see at fanatics on gameday, it's like 70% of our business goes through mobile do you have the same trends for on gameday for football that you're doing a much bigger percentage of your business?

>> mobile is the vast majority of our business and the fastest growing part of our business we'll do $3 billion in online pizza sales this year. >> that's a lot of pizza sales >> it is i would look during games, we're running online deals like you descri described. most during games are online during the week outside of games, we'll see more phone orders then evening hours, people will order on their mobile device more and more. >> how are you using augmented reality? >> those of you who played corn hole at a tailgate, the whole strategy for us is to make home the most fun place to watch nfl football you've gone to a game and tailgated, we instituted homegating we've taken corn hole. we call it bean bag blitz. you can download the app on the ios store and basically put your phone in front of one of our pizza boxes and you can play

with your kids >> and people buy into this? >> they do they love it >> let's talk about what you're seeing from the consumer are you a company whose fortunes rises and falls with the company or are you one of those that does well even when things turn south because people are looking for a bargain? >> it's hard to make sort of blanket statements because there's so many different areas. what i would say is this we're seeing a consumer that is very value conscious i think anyone that's sort of been on this show that's in the restaurant business, i think you hear people talking about value and having price points that are accessible we're seeing a labor market that is very competitive. in many respects, that's terrific we're putting more and more dollars on folks in the restaurants. >> let me ask you a big picture question i was just thinking about. if you think about others like grub hub, uber eats, are they good for your business or bad?

>> great question. i'm on the board of grub hub >> so you should be friends. >> we are friends. we made a strategicinvestment in grub hub. we think rising tide lifts all boats. delivery is a scale game the more scale we can bring, the better for the delivery business and what we see is when customers start buying food from us, from grub hub, they end up being more and more prone to order from restaurants at home over time. >> long-term, higher margin business for you to get a grub hub order or longer term would you like people in store or picking it up themselves i assume there's a higher margin to take grub hub out of the picture. >> longer term it will create nor brand love if we could be at home with them more often it's been well publicized that orders at home are higher check. so you do see a little bit more dollars immediately. long-term this is about -- >> but you're also giving some

of those dollars away. >> you are giving some of those dollars away but they're more prone to try new things too because the mobile device is so good at upselling and things like that >> maybe you make up for any potential gross margin losses by trying to deliver beer how's that going >> hot pizza and cold beer what's better than that? pizza hut's always been in the beer business. we have a competitive advantage with 6,200 restaurants over half of them have the ability to deliver and serve beer today >> joe's waiting for his beer. >> it's a little early >> and we're coming to monday too. i mean, i know i'm springing this on you. but we will be here. you're welcome to come back and update us on how the weekend sales went >> can i ask one digital question on grub hub do you guys get the data meaning the relationship between the customer and who the customer is, what they're ordering, and be able to go to them outside of the grub hub network, for example? >> we do >> this is the biggest issue in

the world of news and subscriptions is the direct to consumer versus using larger portal >> it was important to us to certainly have the customer data and make sure we were able to have the relationship with customers. because we have our own wnt -- >> so you can? >> we can. >> is that true of all the other sites? >> i can't comment but we can >> thanks for coming >> my pleasure >> artie stars, head of pizza hut. coming up, netflix is doubling down on business in france we'll tell you what reed hastings revealed in an interview with french media. and later, new england patriots owner bob kraft. robert kraft joins us to talk about the business of football and everything surrounding it. it will be great stay with us notebooks let your workforce go anywhere. it orchestration by cdw makes sure your data stays close at hand. with the hp elitebook x360, and its innovative security features, including multi-factor authentication,

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netflix ceo reed hastings doubling investments in france and producing 14 local shows that's twice as many as were previously planned in an interview with a french radio station, hastings didn't disclose how much the company would invest in france but said it was many millions of euros. hastings also said netflix plans to set up an office in paris which always sounds like a good idea

that could be a good place to get transferred if you work for netflix. >> could be worse. michael rubin is here. robert kraft will be joining us in just a moment coming up, there's something else going on in france today. we're going to give you a look at the ryder cup leaderboard joe has been keeping at least one eye on -- >> just monitoring not all eyes >> nfl patriots owner robert krafis gngt oi to be live with us from gillette stadium that interview minutes away. "squawk" returns in a minute it's time to get out of line with upmc. at upmc, living-donor transplants put you first. so you don't die waiting. upmc does more living-donor liver transplants than any other center in the nation. find out more and get out of line today.

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with pg&e in the sierras. and i'm an arborist since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly

it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future. welcome back to "squawk box. the last of the breaking news for the week august read on personal income and spending expecting up 0.4%. a little light up 0.3%. no revision on our last look on spending came in exactly at the 0.3% expected and last month's pop at 0.4% remains unrevised. if we look at real personal spending, it was up 0.2% that follows an upgraded 0.2% now standing at 0.3% let's get into the pricing issue. that's up 0.1% year over year, 2.2% those are darn close to expectations and on the year over year,

it's 0.1% cooler than our last look finally look at our last that 2% is pretty steady it's expectations. it's our last look lots of news today the italians, we talked about this last week on an exchange. 2% debt to gdp didn't seem realistic and it wasn't italian yields are moving up acrossively. but maybe even a bigger story. the dollar has really popped since fed day. it's now up over a penny on the week back to you. >> thank you have a great weekend the company focuses on four key area of businesses joins now to talk about what they're doing in this market place right now is ceo of cowan.

we talked a lot over the past couple weeks about what inning we're in we're doing sports metaphors but i feel like baseball -- is baseball a better metaphor than basketball you can't really say you're in the fourth quarter >> i think all are perfect they're all great. i use innings all the time i don't use periods. i dometaphors. >> you need more resolution. four doesn't give enough >> then there's the seventh inning stretch >> exactly we digress >> we're at the end of the first quarter, end of the second quarter. >> where are you >> in what context >> where do you think we are in the economic cycle and do you believe the stock market reflects the economic cycle? >> you know, so it's hard to say we're in the early innings here. obviously coming off the bottom

of 2008. there's also been nothing you can look at historically that's been anything like this. the low growth, no growth. zero interest rate environment i actually think we could go for awhile longer. >> extra innings >> yeah. we're actually in a position where the market is just adjusting to what we consider to be normal. look at where the rates are today on the short-term. this is sort of we're finally getting back after ten years to something people can analyze in a more normal way. this can go for awhile >> when you talk to your clients on the investing end and whether it's the other advisory end, you're telling them full steam ahead? >> well, what we're saying is you have to be strategic on these. if you're looking at always trying to manage with some sort of a disruption, there's always risks. one of the lasting effects is it's always in the back of your mind even when you're sort of moving forward, you're always in the

back of your mind going, what am i missing? i find that with a lot of corporate ceos i'm like what am i missing about this what's the likelihood they had something like that happen again. much the same way we had generations who grew up post-depression and had this amazing economic expansion, i think this is sort of our equivalent for our generation. i think it could go longer because of a low rate environment. and there's still not a lot of unbridled growth economically. and companies need to do things to cut costs and drive margins and so i think the m&a thing could last for awhile. >> where do you stand on buybacks right now in terms of on the advisory side of the business? i guess the question is -- >> so i get this question all the time >> the amount of buybacks we've had over this past year, what does next year look like i could argue that one of the

reasons we've seen the bull run we have is in large part a function of the fact that companies have bought back so much stock >> that is true. you see fewer places for people to put money to work, right? and that's a reflection of the fact we've been in a low economic growth environment. so i think -- i always tell ceos and cfos when they think about buybacks, you should be thinking of shareholder return. you should return to cash holders by dividends that will continue what i always worry about is when people are manufacturing stock prices by levering up on their sheet. i don't see that happening a lot. and so, you know, i kind of feel like we could continue to go along the same line for awhile >> you focus mostly on the middle market. >> yeah. >> in terms of transactions. in terms of the kinds of deals that you see >> right

>> do you feel like in terms of the regulatory environment right now, that any deal is on the table or that actually big is bad and actually it makes it a little more complicated for you? >> i think if you're flying under the radar screen, that's a better place to be i think if you're, you know, some of the cross border transactions are a little bit more challenging i think anything that anything to do with china is challenging. we're stilling a ton of flow cross border with european everyone was worried about brexit and the eu, but people wrap their head around it and move on doing what they need to do >> jeff, congratulations happy 100th anniversary. not birthday >> you look great for 100. >> amazing >> appreciate it thank you. >> jeffrey cowan of solomon brothers no that's confusing whatever happened to him is he retireed? >> he is he's retired

>> got some supermanagement now. >> thanks. >> you're very welcome coming up, bob kraft tom brady, his boss will weigh in on roughing the passer, penalties, ratings i think the dolphins are like 3-0, aren't they >> i'm all about the patriots. >> okay. but they play -- it would be bob kraft's 300th win. fastest anyone has ever gotten there. >> that's right. so try not to talk about it because i don't want to jinx them if anything goes wrong, you're 100% to blame. >> usa 3-1 tiger lost today we'll be right back. mike thomas: ooohh! you're hittin 'em good j! heeeyyyyy! mike thomas: have you ever played golf in the snow before? justin thomas: oh no! mike thomas: (laughing) oh my goodness!

justin thomas: i'm just gonna try to practice for all my life and see where it ends up to. hopefully i'll be good enough to go to the tour. mike thomas: (laughing) good shot big j! (guard) i've seen things unnatural things. these people they don't sleep... like ever. they reveal in extremes and defy limitations. these pursuits may seem unnecessary. but the scariest thing i can imagine is a world where this, doesn't exist.

good morning, everybody. welcome back to "squawk box" here on cnbc where we are live from the nasdaq market site in times square we've got a lot of stories front and center this morning. among them, shares of blackberry rising in the premarket trading. rose 4 cents a share revenue also beating forecast. the stock right now up by 51 cents which is 5%. overseas, italian stocks have extended their earlier losses this comes after italy projected a budget deficit that was much larger than had been expected.

all of that has increased concern that s&p and moody's will downgrade when both agencies review their ratings next month right now the market down by 4% for them and an increasing preference shown for the united states in recent weeks there's new data out it shows that investors pulled $2.2 billion from foreign equity funds over this last week and added $1.6 billion to u.s. fund. this was the third week in a row that u.s. funds have gained at -- assets the nfl season kicked off last night again with the rams wins we're going to say it. if the patriots win this weekend, it will be the 300th victory under the ownership of robert kraft robert kraft joins us now from gillette stadium you'd be the fastest to make it to that milestone, robert. i'm going to say good luck

>> break a leg >> well, we're just excited that we're playing the game we're going to focus on the game i thank you for your good wishes it's been awhile since i've been with you all good pals. you got my special friend michael with you great to see you this morning. >> rubin is totally sticking his -- he's a 76ers owner. he's fully behind the patriots i mean, do you have to -- he's got to travel around philadelphia in a disguise, i think. >> if the patriots aren't playing the eagles, i'm an eagles fan, but -- >> who do you want to win the super bowl >> truth is the patriots family first the kraft family are my guys >> and you gave an answer. not everyone would do. that's pretty good, bob. >> i can say what i want >> another reason to stay private. >> exactly >> so robert, i have seen people

talk about the patriots whenever they lose a game it's like, oh. this might be it in terms of the season how are you feeling? usually by the end of the season, there's a lot more wins than losses in your tenure >> we have a saying up here in new england that the season really starts after thanksgiving and now teams are getting to know one another we surely have a ways to go. it's not the kind of start i would have liked but it's part of the building process. and we believe strongly in this team, our coaching staff, our quarterback. and we're going to have a lot of fun. >> i'm not -- you know, i'd never use the term fake news, but i read all these manufactured stories about belichick versus brady and, you know, the three of you are talking this way and that way.

the media likes to write stuff, don't they especially with the patriots is there smoke, there's fire or do you read it going i don't know where this came from? >> you know, joe, you have a great marriage because i've met your love we wife. and we've been together 19 years which is unheard of for a head coach, a quarterback, and an ownership group. thankfully we've had a lot of success. whenever that happens, you become a target. we understand that and there's always tensions and issues and different things you've got to deal with. but that's part of the privilege of being successful. you know, i have a little saying that envy and jealousy are incurable diseases you'd rather be a recipient than a donor. so that's part of what's going on now >> robert, talk about the health

of the overall nfl business. this morning we were talking with brian about ratings we know ratings have been pretty strong this year kind of flattish overall i know primetime has been down in the low teens but, like, how's the overall nfl business doing today >> let me just speak as chair of the broadcast committee and i've been involved for over 15 years. i think there's a misconception about our ratings. if you think about it like last night which was the biggest news stay in our history since the election of the president, and everybody was absorbed with news and i'm sure those ratings are way up our thursday night game, our first game on fox and amazon and nfl network was up 8% last night. you know, in '07, 22 of the top

hundred programs were nfl games. ten years later in '17, 72 of the top games, top shows were nfl games. and the best news for the nbc family is for the seventh straight year sunday night football was the number one show on primetime tv. no other network has a record like that for a primetime show so i think we got to do a better job on our messaging general television, broadcast television, ratings are down across the board but the nfl is still pretty strong >> it could be maybe more nbc carried games on, i don't know, thursday or other days might be the answer to it if it goes so well on sunday, bob. is that being discussed? >> well, i think all our networks are doing a good job. >> oh! >> part of it is we got to -- we have to give you a good product, but part of the excitement of

what's going on now, there are a lot of young great new quarterbacks coming on the scene. >> yes >> look at that game last night. the two quarterbacks were great. and the whole -- i stayed up and watched the whole game >> clearly the nfl still dominates in the united states the nba has really created quite a remarkable international strategy and at the same time you also have soccer on the international side coming to the united states in a more meaningful way what's the long-term international strategy, you think, for the league when it comes to rights and getting the game out there >> well, it's a good question. and it's a real challenge for us and one that we deem very important. remember a game like the nba or soccer, that's played worldwide. we are trying to do a better job in terms of having our game be

exposed worldwide. i think that what's happened with gaming and fantasy helps us a lot in terms of making it a very interesting proposition as we try to educate people on our game it's made for the gaming apps. whether you go against individuals or a group of friends or all the potential propositions, we're very excited what that means for the growth and development of this sport. >> you talk about international. i did a little research this morning. i've seen you're 3-0 internationally all for away games. is there a time in the not too distant future we may see a team permanently based outside of north america? >> well, it's interesting you say that when we played our first game in london i think it was about seven years ago. i predicted that i thought eventually there would be a franchise there. and i think it would be good for

us if we did it in the uk first. and we use that as a european base we have very strong support in germany as well. and the game is getting exposed all over we like our record playing overseas >> but you're not going to move internationally even with a 3-0 away record, right >> no. >> hey, bob. you sell boxes anymore what's kraft industries up to? >> well, you know, after 50 years of being in the business, it's really become quite a good industry it's consolidating >> how's the economy >> jonathan's going to get very mad at me, but we're going to hopefully announce something soon that'll be very exciting. and we've -- this is going to be a record year for us in our paper and packaging. we have records in every part of our business in the export and

the domestic consumption it's the -- the economy is very strong >> you okay with it -- >> that was a big hint give us more >> how about the tariffs you okay with that, bob? >> well that's -- i think the tariffs -- look. -- look, that's -- everyone has certain problems with the tariffs. but i believe that's a short-term issue really what washington is doing is correcting a big problem for us when you have a 500 billion to 100 billion deficit with china, we ship a car there and we pay 25%, they ship a car here and they pay 2.5%, that's not right. there will just be adjustments we'll go through some rough tumb tumbles, in the end it will sort itself out >> your eyes lit up to talk

about that i don't think you would be the owner of the patriots without kraft industries you're absolutely right, joe >> thanks for coming on. it has been too long it's okay michael brought you on >> don't say anything about the 300 game >> i think it's nice that you try to -- you're going back to philly and you'll have to hide down there >> great to see you. >> who's next? >> when we come back, we'll get cramer's take on the elon musk charges. futures under pressure dow down by 71 points. nasdaq down by 25. s&p down by 7. and to manage this risk, the world turns to cme group. we help farmers lock in future prices, banks manage interest rate changes and airlines hedge fuel costs.

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let's check in with jim cramer he's getting ready for "squawk on the street. jimmy still out in san francisco, talking about ga garropolo. the eagles -- >> let's talk about the eagles >> i'm an eagles fan except when

they play the patriots >> i saw michael on the sideline if you read "fearless" the coach's book you will recognize this man will do a lot more in terms of what i would regard as risky, but in terms of the actual science, not risky kinds of plays it's exciting to watch the eagles, they do what other teams don't do they have a different notion of risk >> jim, elon musk, discuss >> look, i was listening to both you and david faber, to me you got the deal of a lifetime you spring the deal of a lifetime people fight for that kind of deal endlessly no-admit, no-deny is the home run of a lifetime. if you don't take it, they go all martha stewart on you. they refer to justice. you can't have a situation where the s.e.c. battles it alone. what a mistake by him, but he made a series of mistakes that

indicates how erratic he's become >> so therefore you sell >> you have a phony board. there, i said it i think the bulls -- like a ron barron, a bull historically on "squawk," they won't lose faith. as loon ng as he's there, not in jail, they won't lose faith. >> the idea that the company couldn't raise money as long as it's under an s.e.c. investigation. how big of a problem is that >> there is also some investment bank looking to make money, but if the ceo might be going to jail, but the real bulls have a lot of money and they kept the bulls in the air for a long time when martha stewart went to jail, you still had mso. when sam waksal went to jail,

you still had a company. this is more like martha stewart. except she's better. >> we'll see you in a couple minutes. trades? great question. see, for a full service brokerage like ours, that's tough to do. schwab does it. next question. do you offer a satisfaction guarantee? a what now? a satisfaction guarantee. like schwab does. man: (scoffing) what are you teaching these kids? ask your broker if they offer award-winning full service and low costs, backed by a satisfaction guarantee. if you don't like their answer, ask again at schwab.

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thank you. >> what a morning. >> go sixers >> love it >> proof was in the pudding during the playoffs. >> we'll have you come to every game as long as you're winning >> i'm there for you "squawk on the street" is next good morning welcome to "squawk on the street." i'm david faber along with sara eisen. we're live from the new york stock exchange jim cramer is still at one market in san francisco. caa carl has the day off you can see we are looking forward to what would be a slightly down open european markets have been open for some time. sara following the bon