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Quest Means Business
NATO, Poland: Missile Likely Came from Ukraine Air Defense; Genesis Lending Unit Halts Withdrawals, Citing FTX Collapse; Yellen: More Oversight Needed after FTX Collapse; Elon Musk's Leadership Style Comes under Scrutiny; TickPick Co-CEO Says Ticketmaster Systems Fail "Shocking"; Dash to the Bell. Aired 3-4p ET
Aired November 16, 2022 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RAHEL SOLOMON, CNN BUSINESS HOST: It is the classic definition of a choppy day on Wall Street. Take a look at the Dow. You can see it is (down) just
fractionally or 21 points. Those are the markets and these are the main events.
The President of Poland says that a missile that struck his country Tuesday probably landed there by accident and was likely fired by Ukrainian
Poland's Ambassador to NATO is with me.
Elon Musk's ultimatum to Twitter employees go extremely hardcore or go home.
And Taylor Swift fans tell Ticketmaster, the problem is you.
Live from New York, it is Wednesday, November 16th. I'm Rahel Solomon in for Richard Quest and I too, mean business.
Well, 24 hours later and countless questions later, we are getting more insight now into the missile that struck Polish territory on Tuesday,
killing two people. The consensus seems to be that it was not an attack by Russia on a NATO member. Polish and NATO leaders say it appears to have
been a missile Ukrainian forces fired as they try to defend their territory from multiple Russian attacks that they had faced that day.
An American official tells CNN, Ukrainian military informed the US and allies that it was trying to intercept a Russian missile around the same
time and place.
Matthew Chance on the scene there in Poland with the very latest now on what we know.
Matthew, thanks for being with us.
Let's start with just a timeline in terms of when we will know with more certainty where the missile came from and who launched it and how
investigators will determine that.
MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, those investigators, Rahel, are on the scene right now. You can see the weather
is really appalling here. It is torrential rain, and it has got dark, of course, and there are still teams of people, just a few hundred meters from
where I'm standing right now along this road, which has been sealed off by the police for the past couple of days since the incident took place while
forensic teams work, you know, basically around the clock to try and piece together exactly what it is that caused that explosion, and of course,
where the missile was fired from.
CHANCE (voice over): A Russian-made missile striking a NATO ally and setting the world on edge, but it now seems the explosion that killed two
Polish farmers here was a tragic accident, not as feared, ordered by the Kremlin.
JENS STOLTENBERG, NATO SECRETARY-GENERAL: The incident was likely caused by a Ukrainian air defense missile fired to defend Ukrainian territory against
Russian cruise missile attacks.
But let me be clear, this is not Ukraine's fault.
CHANCE (voice over): Not Ukraine's fault because its military was defending against the barrage of Russian missiles, targeting essential infrastructure
and killing civilians. Among the victims on Tuesday, because this 69-year- old woman. She was visiting her husband's grave in Kyiv when a piece of shrapnel tore through her body and killed her.
As winter sets in, Russia is making Ukraine civilian suffer with reckless abandon. But what happened here in Poland shows just how dangerous that is
for the whole world, too. This, while Ukrainian officials are redoubling their request for more advanced air defense systems from the United States
They have also committed to cooperating with an investigation into what happened here and admitted their air defenses were active in the area.
But officials are clear, Russian President Vladimir Putin is responsible, dragging millions of Ukrainians and now a sleepy one-street Polish town
into his war of choice.
CHANCE (on camera): Rahel, the Russians for their part have categorically denied any kind of relationship to this incident, saying that it is merely
a provocation, that they would even be linked with any involvement in it -- Rahel.
SOLOMON: And Matthew, understandably, look, you've been at the scene around the clock from what I can see since yesterday, but as much as you have been
able to speak with people there in Poland, I mean, how are Polish people feeling both about what happened yesterday and the potential for even
CHANCE: Well, I mean I think there is a lot of anxiety here, particularly in this border region of Poland, close to Ukraine, where, you know, they
haven't been struck in this way before, the war in Ukraine hasn't spilled over in this fatal way at any point in the past nine months or so.
And so people are very shocked across the country. The Army has been put on a higher state of alert and we are seeing many more troops in the region to
sort of bolster defenses, but also to reassure the local population. And the residents who I've spoken to in this small, little close-knit
community, just a few miles, a few kilometers from the Ukrainian border, are also very, very frightened that this sort of thing could happen again.
And so you know, and they have -- of course, they knew personally, the two people, they are produce citizens, farmers who were killed in this attack,
and so, it sent shockwaves to the local community and to the country at large -- Rahel.
SOLOMON: Matthew Chance for us there in Poland. Thank you, Matthew.
NATO meantime says that Russia bears the ultimate responsibility for what happened as it continues its illegal war against Ukraine. There has been a
flurry of top level talks, including a briefing by NATO's military Commander to allies. A formal investigation, as we just heard, there is
also underway, a confirmed attack by Russia would represent a significant escalation under NATO's Article V, which reads: "The parties agree that an
armed attack against one or more of them in Europe or North America shall be considered an attack against them all."
"And consequently, they agree that if such an armed attack occurs, each of them will assist the party or party so attacked by taking forthwith
individually and in concert with the other parties such actions as it deems necessary."
Baltic States have voiced their support for Poland, but they are equally urging caution until the details of what happened are certain.
For example, while Poland says that the missile was Russian-made, both Moscow and Kyiv have been using Russian-built weapons, the Estonian Prime
Minister told CNN's Christiane Amanpour, it is vital that NATO stays calm.
(BEGIN VIDEO CLIP)
KAJA KALLAS, ESTONIA PRIME MINISTER: Russia is trying to say that, from the beginning that Russia is in the war with NATO, so is it really a trigger
that they want to show that NATO is really stepping up so they can escalate even more or what is it all about?
I think we really have to keep a cool head, knowing that there might be a spillover effect, especially to those countries who are very close, and it
is all because Russia is bombing civilian infrastructure, not the military infrastructure that is usually done in war, but really civilian
infrastructure so that it would be impossible to live in Ukraine.
(END VIDEO CLIP)
SOLOMON: All right, let's get reaction from Poland itself. Tomasz Szatkowski is the Polish Ambassador to NATO and joins us live.
Tomasz, thanks for being with us today.
You know, I want to first just get your reactions to these comments coming out of the Kremlin, which called the reaction from Poland and other NATO
allies, absolutely hysterical. How do you respond to that?
TOMASZ SZATKOWSKI, POLISH AMBASSADOR TO NATO: Well, first of all, thanks -- thank you for having me, and as regards our reaction, I would like to say
that today, when I briefed allies during the meeting of the North Atlantic Council, all allies have expressed their appreciation towards cool
headedness and calmness of our response, because as you might have noticed, we have waited some time until we were more or less certain what happened,
and we didn't issue any attribution prematurely. We also didn't rush into conclusions.
At the same time, we have to keep those facts in a certain context. We have to keep proportions, and nothing would happen. No accident, no incident of
that nature would not have happened unless Russia first of all, didn't attack Ukraine. Secondly, unless Russia didn't commit, conduct war crimes
in terms of attacks against civilian infrastructure. So Russia is -- I mean, the ultimate responsibility lies with Russia.
SOLOMON: Ambassador, what more can you tell us about Poland's reaction maybe not immediately to what happened here, but in the future in terms of
defending, maybe air defense? I mean, what can you tell us about that?
SZATKOWSKI: Well, first of all, the immediate reaction has been that the government has ordered specific units of our Armed Forces to increase the
awareness that first of all, pertains to those units that do with situational awareness like Air Force, specific units that are scanning our
airspace with radars and so on and so on.
We, of course, engage within the Alliance. I was briefing the Alliance today. I was also engaging with the Secretary-General and the Supreme
Allied Commander of Europe and to make sure that all the measures that are put in place, by nature are sufficient, because we have to bear in mind
that since 24th of February, NATO is in a very specific situation.
The operational plans for defense of the Alliance have been put into use for the first time and the Supreme Allied Commander Europe, General Cavoli
exercises a certain degree of authority over capabilities of allies and has some capabilities with regard to vigilance over our territory.
Thanks to that he was able to basically follow what was going on during the Russian attack yesterday, and he also offered his assessment, which is in
line of what we are thinking at this stage.
SOLOMON: Ambassador, do you think that this changes the calculus at all this, you know, this missile launch or this missile attack in Poland -- do
you think that this changes the calculus at all for NATO in terms of the type of weaponry that may be needed in Ukraine or steps moving forward?
SZATKOWSKI: Well, of course, I mean, that makes us understand even more that the of war that Russia is waging is a risk to Ukraine, is a risk to
the vicinity of Ukraine, like Poland, but it is often an indirect risk to the entire Euro-Atlantic area, to different implications like refugee
waves, like increased prices of the energy resources, and so on and so on.
So this is a situation that is more serious since the end of the Second World War and we are able to witness it with our eyes, and now our citizens
are paying the price, two unfortunate victims of this tragic, tragic event in Poland with loss of life which we naturally mourn today.
SOLOMON: It absolutely was tragic, and to that end, Ambassador, I'm just curious, what can you tell us about how the people of Poland are feeling?
We just had our correspondent there on the scene who talked about the fact that people in that town are feeling frightened or feeling uncertain about
whether this could happen again. I mean, what can you tell us about how Polish people are feeling after this incident?
SZATKOWSKI: Well, a certain level of apprehension is understandable, however, I think the government together with all political forces, are
doing a lot in order to reassure the population that first of all, we are sort of in control of the situation that we are also cooperating with
allies, and hence a lot of communication between my President and Prime Minister and the world leaders like President Biden yesterday, Secretary-
General of NATO, and many, many others, and lots of eyes with many partners around the globe who expressed their solidarity and condolences, to which
we are naturally thankful.
SOLOMON: Ambassador, thank you. Thank you for the time today.
That's Ambassador Tomasz Szatkowski.
SZATKOWSKI: Thank you, ma'am.
SOLOMON: And coming up, contagion from the collapse of FTX, a crypto bank hitting pause on withdrawals amid a liquidity crunch.
Meanwhile, a US House Committee now once the FTX founder to testify. Stay with us.
SOLOMON: Welcome back.
The implosion of FTX continues to rattle the entire digital asset market. The latest fallout, the lending arm of crypto investment bank, Genesis.
Global trading has suspended operations after a surge of withdrawals sparked a liquidity crunch. The company blaming market turmoil from the
failure of rival FTX.
Genesis is one of the biggest lenders in the crypto industry originating $131 billion in loans last year. That's according to its website. Other
crypto exchanges are also working overtime to try to reassure users that their funds are safe.
Among them, Coinbase.
CNN's Julia Chatterley asked the platform's CEO, Brian Armstrong if the crypto community and investors misjudged FTX founder, Sam Bankman-Fried.
(BEGIN VIDEO CLIP)
BRIAN ARMSTRONG, CEO, COINBASE: I feel duped as well.
I mean, he was incredibly compelling and confident, and clearly an intelligent individual.
You know, I viewed him as somebody who was perhaps a bit young and maybe even reckless at times, but certainly not fraudulent. I didn't see that
coming. And so, you know, a lot of venture firms, I think, are going back and looking at what diligence they did as well, and what were the signs?
What could they have seen?
I know, for myself, just seeing over the last year, I knew how much revenue we had done as a public company. You know, last year, we did $7 billion in
revenue, and I knew what our budgets were to kind of go do venture investments and these kinds of things.
And FTX, which was a relatively small competitor at that time, you know, they've done about one-seventh of our revenue, they seem to have unlimited
funds to go invest in things, and I certainly was scratching my head a few times to think like, "Where are they getting the liquidity from this?"
You know, they have this other entity called Alameda, which was their market maker/hedge fund, and people kept telling me what that thing is, it
is just printing so much money, that is how it is explained.
But, you know, we always, we never wanted to have a market maker. We felt it was a conflict of interest since we are operating an exchange, and you
know, it just seemed too good to be true. And so now, when I look back, I kind of I wonder if I should have noticed something sooner?
JULIA CHATTERLEY, CNN INTERNATIONAL ANCHOR, "FIRST MOVE": Yes, I think the reflection on this is vitally important for many reasons, because it's just
provided further fuel to all the skeptics for the technology, for the industry, which is an added complication, and I guess, it's a complication
for your business, too, as we've discussed, and I want to talk about that more.
Firstly, there are likely, would you agree that the other people struggle as a result of the complication that this has added and the pressure that
this has added to the sector? I think the latest is Genesis, so the lending arm of the crypto brokerage. Now Genesis saying it's suspending
withdrawals. Binance, which is another crypto exchange, a giant one out there is talking about a recovery fund to try and support those that --
good companies that are now under severe pressure as a result of this.
Can I ask if you intend to join that recovery fund or set up your own? Is there opportunity here in what appears to be chaos?
ARMSTRONG: Yes, so you're correct that there is certainly contagion happening in the industry right now, as everybody is sort of looking at
various private companies and saying, hey, what else might we not know?
ARMSTRONG: I think there is also increased scrutiny on these offshore exchanges that may, you know, may or not be following the rules in
different jurisdictions. And so it's right appropriately. So it's raising a lot of questions about these companies.
Now, I think while this is net bad for the industry, for the moment, it's net positive for Coinbase in the sense that we've been following this
trusted and regulated approach for the last 10 years and it's kind of a validation of our strategy. And I just want to say, you know, crypto is not
going anywhere, by the way.
This is -- we are going to continue to build in this industry and one bad player does not undermine the entire thing. Similarly to how Bernie Madoff
doesn't cause us to question the entire financial system.
(END VIDEO CLIP)
SOLOMON: In the Bahamas where FTX is based could not have prevented the exchange's collapse. That is according to the country's Prime Minister.
Speaking to Parliament, Phillip Davis said that his government has found no deficiencies in its crypto regulations. US lawmakers meantime want FTX
founder, Sam Bankman-Fried to testify next month about the failure. The House Financial Services Committee also plans to question other top crypto
Better Markets is an independent organization working to reform the financial system. Its founder and CEO, Dennis Kelleher has long been a
skeptic of the crypto industry, and he joins me now from Washington, DC.
Thank you for being with us, Dennis.
I'm just curious first, what reaction you have to that comment from the Bahamas that essentially, it wasn't us that this was not a regulatory
failure on their part? What do you think about that?
DENNIS KELLEHER, CEO AND COFOUNDER, BETTER MARKETS: I mean, the common response to a global mess like this is for everybody to say it wasn't me
and point fingers everywhere else. But really this rush to judgment to exonerate themselves, whether they are regulators or political officials,
and whether they're in the United States or elsewhere, lacks a valid basis at this point.
Most people don't have any idea what happened. What we do know is that FTX had a sprawling global variety of activities and entities. They bought
multiple different jurisdictions, entities, products and contracts, and the facts, thus far, are not known and aren't going to be known for a while. So
people should not assume either that their laws work well, and their regulators work well, or that they all need to be starting all over again
and rush to pass legislation.
We do know, when you lose this much money this quickly, when customers and investors are harmed, when an entire industry is shaken and where there are
collateral consequences that are still spilling out in the financial system, what we really need are the facts and we need facts before people
start jumping to conclusions.
SOLOMON: I take your point that we are still learning the facts. I do wonder, however, because this does appear to be a blackeye, and certainly
for FTX, but some would also argue for crypto at large, if we can start to have a conversation about what potentially went wrong here, what
regulations might have prevented this?
And I wonder, you know, I was reading some of your notes up from before and you said, look, there is no need for new legislation or regulation. What is
needed are politicians to fully fund the regulators and to publicly support them.
So, what's step one? I mean, where do we go from here?
KELLEHER: Well, to me, step one is that the industry has to decide whether it wants to be a legitimate, lawfully regulated industry or if it wants to
continue to be basically a lawless industry.
Thus far, the industry has chosen to fight the regulators and fight the laws and use hundreds of millions of dollars in campaign contributions and
lobbying to try and get the US Congress to pass special laws for their special interests that give them the form of regulation without the reality
Today, about 80 percent, it is estimated that crypto tokens comfortably fall within the definition of securities, and the balance of those tokens
fall within the longstanding definition of commodities.
Those companies that are selling unregistered securities as tokens and unregistered commodities, as tokens need to get registered, they need to go
into the SEC and the CFTC and get registered, and if they don't -- and the exchanges also -- and if they don't, the regulators ought to start bringing
down the hammer on them, because the law applies to them. The issue is, are they going to follow the law or not?
SOLOMON: Well, I think some critics would argue that when you over regulate an industry, you could crush innovation. I mean, do you buy that? Or do you
think FTX is such a perfect example of why more regulation is needed?
KELLEHER: Every fraudster in the world makes that claim and every regulated entity that should be regulated that doesn't want to be regulated, because
they don't want the costs that come along with customer investor and financial stability protection, that's what those costs do. They protect
investors, they protect customers, and they protect financial stability. And yes, they cost money. They also protect the system.
And so, it's not an issue of innovation or regulation, it's an issue of complying with the laws so that you have innovation that doesn't threaten
customers, investors, or financial stability.
SOLOMON: One thing that got my attention is this issue of the revolving door between regulators and between top executives. Now, you know, you make
the point in terms of what we're seeing in crypto, but some would also argue that we have seen a revolving door in more traditional financial
services, the investment banks and such, and so how much of that do you think was at play here?
KELLEHER: Well, you're absolutely right, the very pernicious and kind of legalized corruption that the revolving door enables where you have public
officials going through the revolving door and basically selling out their public service and influence peddling by using their specialized inside
knowledge that they gained in their public service.
They continue to use their Rolodex with the personal phone numbers and e- mails to contact people at the agencies and in Congress and elsewhere to get access and influence, and that needs to be a big part of the
We need a full investigation in the United States, as well as outside. We have an industry that kind of construct itself in a way that it evades as
much regulation and laws as possible, by having their global activities outside the United States.
Lehman Brothers did the same thing before 2008. Its derivatives book was run out of London and much of the 2008 crash happened because of overseas
activities that came back and unfortunately crushed the United States and the United States taxpayer. We're seeing that play out again.
SOLOMON: Excuse me --
KELLEHER: And I should say, and back then, and now, it has been greased by the revolving door that needs to be policed much more carefully, and much
SOLOMON: Dennis, we only have time for one more question, but I'm just curious, do you think that this will be a defining moment for crypto? Do
you think for certainly private individual investors who may have lost a lot of money in FTX, or even larger entities that once your hand has been
burned once before with FTX, that, you know, people will start to sit this out? Or do you think in a few months, it'll be business back to business as
KELLEHER: Boy, I hope they learned the lessons and let's not forget, it's not just FTX. Over the last year, two-thirds of the value of crypto has
been vaporized. Multiple crypto-related entities have failed, that, you know, tons of investors and consumers have been heard.
It isn't just crypto, there's rot at the core of this industry and what has to happen is the industry has to become compliant with the law like every
other legitimate business, and hopefully, the hundreds of millions of dollars they are spending in campaign contributions and lobbying won't
cause people to now stop, think, and act in the best interest of the public.
We met with Sam Bankman-Fried. We weren't impressed. We weren't fawning and gawking over him like some of the smartest financial people in the country
and the globe, frankly, we asked him some pretty tough questions that he didn't have very good answers to, and it didn't take long for us to figure
out that, frankly, there were big, big problems with what he was doing and what he wanted to do that threatened customers, investors, and financial
And that's why at Better Markets, we have consistently opposed his attempts to eliminate the protections that we have in this country for customers,
investors, and financial stability. And when you don't have a bunch of money being stuffed into your pocket, those things are pretty easy to see,
frankly, because we saw them and we're not all that smart, you know, and other people are a lot smarter than us.
SOLOMON: Well, I think a lot of people would disagree with that, but Dennis Kelleher, good to have you with us. I appreciate the insight today.
SOLOMON: Coming up, Elon Musk was in a courtroom today defending his CEO pay from Tesla. More on that trial and also what he said on the stand about
his future role at Twitter. Stay with us.
SOLOMON: Welcome back.
Elon Musk took the stand today in a lawsuit over his pay at Tesla. The trial concerned a 2018 package valued at the time at $56 billion. The suit
was brought by a shareholder. It notes that the board did not even require Musk to serve as a full-time CEO.
His lawyers and Musk say that the stock incentives were designed to encourage bold steps. Now opposing lawyers also question the massive
amount. They say it's almost equal to the GDP of the state of Delaware, where the trial is taking place.
The package was shareholder approved though. Also in his testimony, Elon Musk said that he expects to find someone else to run Twitter. That comes
just hours after he issued an ultimatum to Twitter employees, saying, essentially work long hours or leave.
He says that employees will need to be, quote, "extremely hardcore" to build what he calls "a breakthrough Twitter 2.0." He's giving Twitter
workers until 5 pm Thursday to decide if they want to stay. He says any who don't sign up to his way of working will automatically be laid off with a
Disharmony at Twitter already growing more apparent with mass layoffs since Musk took charge and public clashes between the new boss and Twitter
employees. As the influence of Musk spreads, his leadership style has also come under the spotlight. CNN's Clare Sebastian looks at the man who said
this week he has too much work on his plate.
ELON MUSK, CEO, TWITTER: I mean I'm really working at the absolute most amounts that I can work from morning till night, seven days a week.
CLARE SEBASTIAN, CNN CORRESPONDENT (voice-over): Speaking from a room which he said had lost power, Elon Musk detailing the impact of his new
power as Twitter's owner and CEO.
MUSK: I have too much work on my plate, that is for sure.
SEBASTIAN (voice-over): Touting his personal work ethic then telling staff at Twitter in a memo shortly after they need to commit to "extremely
hardcore work or leave" fits a pattern for Musk.
MUSK: Last time -- you actually slept literally on the floor because the couch is too narrow.
SEBASTIAN (voice-over): In 2018 he told CBS News he had been sleeping in his California factory while trying to fix production problems.
UNIDENTIFIED MALE: It is pushing people to a limit beyond what most of us would consider fair, if you look Basket, Tesla and SpaceX. What he is
asking people to accomplish under tight deadlines is something we don't even know is technically possible.
SEBASTIAN (voice-over): To say Musk is a culture shock for Twitter's staff, the half of them that he did not fire would be an understatement,
having mandated 40 hours a week in the office for Tesla staff this June.
He has now canceled much of Twitter's work from home policy, which just eight months ago allowed employees to work from home forever if they
Musk seems to thrive on disruption, promising to "do a lot of dumb things at Twitter in the first few months."
And some would argue already delivering
UNIDENTIFIED MALE: It's mania mixed with chaos. It's just it's hard to imagine where it goes from here.
SEBASTIAN (voice-over): Others argue Twitter, a company that took 12 years to turn an annual profit, might benefit from Musk's brand of
UNIDENTIFIED MALE: We have to remember that Musk comes from a culture of SpaceX, where he built in the culture there that it's acceptable for a $100
million rocket to explode and you can move on and build another one the next day.
If you come from that kind of environment, messing up a checkmark on Twitter is honestly not as big a deal, I think, from their eyes.
MUSK: It's very important to accelerate the transition to sustainable transport.
SEBASTIAN (voice-over): Beyond the pay case. Musk is a leader, known for his desire to change the world and is having some success doing it.
MUSK: Well, I think it's very important for there to be an inclusive arena for free speech.
SEBASTIAN (voice-over): His vision for Twitter, a company he tried to back out of buying, may prove his most divisive yet -- Clare Sebastian, CNN,
SOLOMON: Fans of Taylor Swift are anything but enchanted with Ticketmaster. On the second day of presales to see the singer's upcoming
tour, fans say the ticket site crashed and froze. Some say they waited for hours for their turn.
Because of the glitches, a presale for Capital One cardholders was delayed until this afternoon. Fans taking to Twitter to express their dismay. One
complained about Ticketmaster's lack of preparation. Another quipped that the concert is in danger of being empty if the online queue did not move.
The problems reigniting a conversation about Ticketmaster's dominance. U.S. lawmaker Alexandra Ocasio-Cortez called the company a monopoly. She says it
needs to be broken up. Ticketmaster calls itself the world's largest ticket marketplace.
It has however long faced questions over what some view as a lack of competition. Over the, years it's also faced complaints about its pricing
and its fees. The band Pearl Jam filed an antitrust complaint against Ticketmaster in 1994 without success.
Members even testified about it on Capitol Hill. Brett Goldberg is the cofounder and co-CEO of TickPick, he joins me from New York.
The natural first question is, what do you think about these concerns about Ticketmaster being a monopoly, perhaps behaving in an anticompetitive way?
BRETT GOLDBERG, COFOUNDER AND CO-CEO, TICKPICK: That is a big question. There is no question that Ticketmaster and Live Nation is the biggest
ticketing company in the world. The merger did create a very big entity that they are the best at it, to be honest.
And there is a debate going on whether they have too much power or not. I'm not going to quote or state on that. But they do control the vast majority
of the venues. And they grow their primary ticketing. There are competitors. You have people like SeatGeek, who are trying to compete with
Ticketmaster. And you have agee (ph) as well.
SOLOMON: And TickPick as well.
GOLDBERG: On the primary side, there are distinctions. TickPick it is a no-fee secondary ticket marketplace. There are some primary tickets that do
get distributed through marketplaces like ourselves. And we definitely differentiate by showing all the prices no matter what, as the state of New
York requires, if we're going to do it right.
Just like we're going to do it right anywhere else in the world, where, unfortunately, the rest of the ticketing landscape is that the nature is to
hide fees and ultimately, try to get people to funnel (INAUDIBLE) lower prices and ultimately tack on fees at the end.
SOLOMON: I take your point, it's not exactly apples to apples because TickPick is more of a secondary market.
I do wonder, though, as we try to take a look behind the curtain of the business of Ticketmaster, is it really that hard to manage the type of
volume that we are seeing for Taylor Swift?
Some are questioning, as I pointed out, why wasn't Ticketmaster more prepared?
Walk me through that.
Is it that difficult?
GOLDBERG: I'd be honest; it is shocking for the systems to fail yesterday. They have been doing this for years. I think they didn't really anticipate
even knowing how big Taylor Swift was, just how big is was going to be.
I think the recent album she released just magnified her success and clearly states she is the biggest artist in the world at this. Point
SOLOMON: I think to that, point I think there are 50 plus shows for this concert. There are 20 cities. So it is a pretty massive concert. I do want
to ask you, you are a secondary market player.
Do you have tickets for the show?
If so, how much are they costing?
GOLDBERG: It's interesting; even in the space and as an expert, it is hard to decipher what exactly is real and what is not. So you have a landscape
where you have sellers that know they're going to get inventory maybe because they're a season ticket holder of the Giants. Maybe that's going to
give them access.
I'm not saying that is the. Case but there are certain stadiums where you can have a ticket every single event there. So people may be selling things
before they are on sale. As a marketplace, it's hard to decipher that.
What we have been doing is -- we don't think this is a good time for a consumer to buy a ticket right now until it's actually gone on sale and all
that inventory has made itself available. The pricing is really difficult to understand from a consumer perspective and from a solid perspective.
What is the fair market value?
What is it going to be?
So the onsale was supposed to happen yesterday. The general onsale will be completed on Friday. There is a chance, and see that at times, if you could
time it right, before something sells out and you buy it on a resale marketplace, you time it right, you get a better place. Taylor's events are
a bit different. I wouldn't be trying to buy it before you actually to the general onsale and I would hope and expect that prices do come down.
GOLDBERG: You know, $500 to get in a stadium when you have 180,000 tickets available for three different concerts, I'm hopeful that prices come down.
But it all comes down to demand and how many people.
SOLOMON: I only have time for one more question.
I'm curious, for folks who are going to watch this, wondering, might I be able to get a ticket on TickPick?
Does TickPick have tickets for sale for this new concert?
GOLDBERG: There are tickets available for sale. I would advise to wait if you can, try to get it on the onsale. If you can't, we have great features
like events, track events. We have things called price freeze so you can lock in something right now. And you could track. It and we will try to
help you figure out our prices.
I would certainly use our rapid track, it trying to get these much information as possible. Ultimately, if it becomes where you need to buy in
a resale, 90 percent of the time, we are 10 percent cheaper. So we do believe we are the best marketplace to get tickets if you can't get them on
SOLOMON: Very quickly, you said 10 percent cheaper, do you want to give a range for how much tickets for Taylor Swift are going for right now on the
GOLDBERG: Somewhere between $300 to $500 is the given right now.
SOLOMON: People are going to hear that and wonder, how did you come up with that?
GOLDBERG: It's not that we come up with that; it's the marketplace. Even though the Taylor Swift team, I imagine, is ultimately using some of that
data. So there is dynamic pricing. We've seen what's been happening in recent onsales. Dynamic pricing gets up to multiple thousands of dollars
because you see a demand.
I think that won't happen this situation. But you certainly will see these platinum type seats that will be in the thousands of dollars. And that is
the demand. In the tri-state, area you probably have 7 million people that want to go see what is 180,000 seats available.
SOLOMON: Thank you. I appreciate you being along with us today.
And that is QUEST MEANS BUSINESS. I'll be back at the top of the hour as we make a dash for the closing bell. Up next, "MARKETPLACE ASIA."
SOLOMON: Hello, I'm Rahel Solomon. It is the dash of the closing bell and we are less than one minute away. U.S. markets are set to close lower. The
Dow has been up, it has been down all day with no real clear session trend.
The S&P also lower, about three quarters of a percent there. We call the outlook from Target weighing on retail shares. And the tech heavy Nasdaq is
down about 1.5 percent as a chipmaker plans to cut supply.
And looking at the major European averages, the FTSE slipped a quarter of a percent after the U.K.'s hot October inflation report. The annual rate
there rose to 11.1 percent, its highest level in 41 years.
And that is your dash to the bell, I am Rahel Solomon. The closing bell is ringing.