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I Am American Business

Al Michaels

Producer Notes

If you watch Al Michaels on NBC's Sunday Night Football, you can tell he's a competitive guy. You know he likes to be part of the action. But what you don't know, is that he's equally passionate about the stock market. Al has been a sportscaster for his entire career. But after sports, he can get just as excited about playing the market. Al has been following CNBC since it began in 1989. He knows our anchors and our correspondents like he knows the players on every team. He has avidly followed their careers and the growth of the network. If we ever needed a play-by-play announcer for every uptick and every earnings report, Al would be the guy. He's already following every move.

Video Interview

The "I Am" Q&A

What kind of car do you drive?
A Mercedes. I have had three in 30 years. I don’t go shopping very often. My wife bought the last one, by the way.

What’s your favorite place to go?
My favorite place to go is home, and to the golf course. And my least favorite place? The airport.

What Web site do you like to visit?
Well, CNBC.com. [LAUGHS] What else? ProFootballTalk.com too is pretty good.

What was your worst moment in business?
When I heard somebody say 20 years ago to buy Commodore International because it Was a “screaming buy.” I bought it, and a month later I was screaming. And it taught me to be a bit of a contrarian.

What’s your favorite drink?
Diet Dr. Pepper during the day, and maybe a Johnny Walker Black after a Sunday Night Football game.

What’s your favorite food?
Favorite food is a big, juicy steak. And I mean, a big, big juicy, juicy steak. With a little ketchup on the side. Maybe a bearnaise sauce.

What’s your idea of fun?
To be with my family, and to play golf.

And at work?
I have kind of had a lifetime of fun. It’s been great, you know, doing games and getting in for free.That’s why I started to do this when I was a kid. I said, “You know what? I can go to all of the games, have the best seat, get in for free, and get paid.” That’s pretty good.

What personal weaknesses do you forgive in someone?
If they don’t know any better, I’ll forgive ‘em.

What movie star do you like?
I would say Jack Nicholson, because he is pretty consistent, I mean, through the years. And I know him to a degree personally. You know, I know him a little bit as well and I have had a chance to be around him from time to time. But I just like the way, you know, he goes about things. And his body of work through the years has been fantastic.

What personal qualities do you admire in business?
Probably the same thing I admire in the rest of life. I mean, people who are loyal and honest and,don’t try to beat around the bush and give you straight answers. I think those are the best qualities anybody can have, not just in business but in the rest of life as well.

What was your greatest moment in business?
I won’t mention the stock, but it wasn’t that long ago. I bought a $3 call on a stock, whose expiration date was about 10 days down the line, and the stock - the underlying stock was about 30 points out of the money. And it went up 90 points at the end of the day, plus the next day in the after market.And the call went to, about 75. So a $3 call going to $75 is like… It’s like hitting the Jackpot in Vegas. It’s simple as that. Now, it doesn’t happen… And unfortunately, it doesn’t happen very often. That was, you know, a One-time deal. Plenty of sad tales to tell you, to go along with that one, trust me.

What is your dream?
I kinda lived it out, actually. You know, I got a great wife and family and I am very lucky and, you know, and nothing I could desire at this particular point. Just health, I guess. Just stay healthy.

Do you have a motto?
I don’t have a motto. But you know, the qualities that I love are, you know, loyalty and straightforwardness and, you know, and honesty. It’s just simple as that. That’s what I look for in, in my friends - and I am lucky enough to have enough of them that possess those attributes.

What is your present state of mind?
Pretty good. I am in the middle of the football season, so that’s, that’s fun. And I get to come home and play golf a couple of days a week too. So that’s a nice combination. And eat a lot of good steak.

Transcript

CNBC:
Everyone wants me to ask you about football, but today, we are going to focus on financials.

AL MICHAELS:
It’s like stocks…you know, stocks. It’s the same thing. No one. Throw a dart. Bang. That’s what You do. I watch CNBC, but I still throw a dart.

CNBC:
If you are watching CNBC, you must think that it’s going to give you some edge, or is it just the fun of watching the game go on?

AL MICHAELS:
I think it’s a lot of things. I mean, I learn a lot by watching CNBC. It’s great to watch the market evolve every day. I mean, the market is such an organic thing. Every day is a different day. And some days are better than others. But then again, if you sell some stuff short, a bad day can be a good day for you as well. But it’s kind of fun, because you never know what’s going to happen. It’s very much like sports. The game starts, and it may start to go in one direction, and then all of a Sudden it goes in another direction, and then it might get tied up, and then one team may, you know, Move out in front by a couple of touchdowns, and then the other team comes from behind. It’s very much the way I look at the, the market day. You don’t know what you are going to get. And even when it’s almost over, you still don’t know what the final score is going to be. And that’s what I mean. that, that final hour is the most exciting hour. It’s almost like overtime in a football game, or late in the fourth quarter, because no matter what’s going on at any particular time, you still don’t know what the outcome is going to be. It’s very exciting.

CNBC:
So do you think that same kind of competitive fever that you get watching the markets is similar to what people get when they are watching a sports team?

AL MICHAELS:
Yeah, I think you know when there are no games to be watched, you watch CNBC because I mean, the market is so dynamic, so… A lot of the games don’t start until the afternoon or maybe the evening. And the great thing about CNBC is that you can watch it in the morning - when no games are being played. So that can be your game. I mean, in, in effect, there is a transferal of interest here. And even though it, it’s serious business and billions and even trillions of dollars are at stake in the market, it, it’s a case of, not knowing what’s going to happen from one minute to the next, trying to stay on top of it. It’s a very exciting thing to follow. I mean, I find it to be just this side of addictive.

CNBC:
A lot of people love the statistics in baseball and the numbers and there is a numbers aspect to following the markets too. Are there similarities there too?

AL MICHAELS:
Yeah, I think you have to be pretty well backgrounded in math - at least simple math. And, and it’s very much like sports in regard to people love to follow not only the scores of games but the statistics. People are into fantasy football and all of that and, and they might have a few bucks at stake. Well, you know, the stock market is fantasy football times 100, because there is a lot more money at stake obviously and you are following the numbers, and up and down and all of the rest, and listening to the breaking news and the reports about, you know, well, what so-and-so has, has reported as, as their earnings for a particular period. Did they come in above the mark, below the mark, on the mark, or what happens when they do come out with these reports. I find it too to be very interesting. As soon as the market closes, I mean that after market, those first few minutes when the earnings reports come in and all of a sudden, you know, XYZ reports, you know, 10 percent better profit than they had a quarter ago or a year ago and, and it, and it exceeds Wall Street’s expectations - yet the stock goes down two bucks. And the reverse sometimes happens. So I think it’s great to try to figure out exactly what that is all about. I am not sure anybody can ever figure it out. But one of the things that I think CNBC does so well, is that the analysts are so good at explaining why something happens. So even though you think you know why it’s happening, you really don’t know. And I pay a lot of attention to what they say, because I trust them as the experts. They know what they are talking about. And they elucidate and they make it a lot more interesting for me and everybody else who invests.

CNBC:
Well, let’s talk about winning. Because the fun of watching the game, is the fun of being Involved in the game. But they also want to win in the markets too. Playing the game and winning in both arenas.

AL MICHAELS:
People love to win. They love to win if they are playing a game. They love to win if they are wagering on a game. And if you are in the stock market… I mean, nobody is in the stock market to lose. You want to win. And there is a rush, there is no question about it, when you have a stock, or you have a security, or you have an investment, that does particularly well. You want to win. And, it’s almost like, your team wins, and you get a vicarious thrill out of it; but when your security or your investment wins, it’s even better than a vicarious thrill.

CNBC:
Tell me, how do you handle a losing season?

AL MICHAELS:
You know, it’s like a fan of a team. And, and if the team doesn’t do well, there is an old saying in sports, “Wait ‘til next year.” Well, if you are a fan of a baseball team, then you have to wait through the entire off-season, and hope that you’ll make some trades, or something will happen and your team will be better. But you have to wait a long time. In the market, if you have a losing day, the great thing about it is that the next day, at 9:30 A.M. Eastern Time and 6:30 A.M. Pacific time, the game starts again. And there is no off-season. So if you have a bad day, you know that the bell is going to ring the next day. Now you don’t know what’s going to happen, it’s a big mystery. But it might be a phenomenal day. You can have a 300-point dip one day, and a 400-point rise the next day. You just don’t know. And that’s the one thing you can’t get in sports, because in sports, you are going to have to wait. I mean, if your, if your team is 35 games out of first place in September, you have no chance. But if your investments are in the tank on one particular day, the next day you can feel a heckuva lot better if the market does well and you are able to cash in on that. So I mean, that’s just another reason why I watch CNBC. I have got to be abreast of the action, and I got to be in the action. And it’s like being in the game.

CNBC:
Which came first, sports or business?

AL MICHAELS:
I think being interested in sports made me become interested in business, because when I first started out, I realized that sports were a lot more than what was taking place on the field. There were the games themselves, and I think that’s why a sports fan gravitates to sports. But the business of sports is now as interesting, I think, to the average sports fan as the games themselves. They want to know, you know, “Why doesn’t my team draft this guy, or trade for that guy? And how do we fit somebody under the salary cap?” and all of that. And fans have become very, very astute. And I think there is a co-mingling of, of sports and business. And I think they are both so exciting that if you are a sports fan, I think, if you can learn about business and how it operates, it becomes every bit as exciting as sports. It’s probably a more serious game, because there is a lot of money at stake and people’s futures are very often at stake in business and how you invest as opposed to, you know, having a rooting interest for a team. But still, the principles are the same. And I think if you understand one, you can really enjoy the other and at least become, you know, adept at understanding what it is that makes the world of business so fascinating. I mean, there are just tremendous parallels here, it’s just… And, and I find a lot of the parallels have to do with emotion. You know, there is always an emotional attachment to a team. You know, you are up when they win, and you are down when they lose. You know, and you have this great rooting interest, and you love the drama. And it’s the same thing in business and investing. I mean, you are up when you are winning and you are down when you are losing. But you just got to figure out,you know, “Now what am I going to do? I need some strategy here.” So it’s almost as if… In business or investing, you can become like a baseball manager or a football coach - which you can’t be as a fan. I mean, there is a coach and a manager, and they are going to make the decisions. And you can second guess those people. But if you are an, an investor - and this is one of the reasons I love CNBC - you are the coach, or you are the manager, and you can pull the trigger. You can do all of the things that are necessary to do, so it does all come back to you eventually and not vicariously.

CNBC:
Let’s talk about the evolution of sports, as a business…

AL MICHAELS:
I think if you go back 40 or 50 years, there wasn’t that much money involved in the world of sports. Baseball players didn’t make very much. In fact, most athletes, if you go back to the middle of the 20th century, also had to have other jobs in the off-season. They would play baseball for six months, but they needed to work to, to make ends meet. And so they, they worked 12 months. Now, of course, you work at your sport for 12 months. And the money is enormous. And, and what happened to sports, of course, is that there was so much money that came in from television, and now from other media platforms. And that really what has fueled sports - to the point right now, where you have salary caps in the National Football League over 100 million dollars per team; where you have television contracts that are worth billions of dollars; where you have television programs – for instance, Sunday Night Football, which is always in the top four or five shows for the week; where you have cable entities like ESPN that can afford to spend over a billion dollars a year for the right to televise about 17 or 18 games per season. So what’s happened is sports has become very, very big business, and yet it’s still been able to maintain, I think it’s connectivity with the fans. Even though that sometimes the fans get upset and the fans, you know, say, “Hey, wait a minute, how can that guy be making 2 million dollars a year, he is only hitting .225, he should be in the minor leagues.” But I think they understand, you know, what it is, and that their team needs to be a very profitable team, for that team - their team - to be able to afford to spend the money on the Quality of, of player that they would like to see wear their uniform, and thus, you know, vault their team to the top or near the top of the standings.

CNBC:
Well, despite the fact that it’s a huge business - at heart, are the values of sports the same?

AL MICHAELS:
I think a lot of people think that, you know, the athlete is only in it for the money. Now, there is no question that an athlete - a professional athlete at the top level - can make an enormous amount of money. In a couple of year period, can make more than the average worker might make in a lifetime. And I understand that. And then, and there are people who say, “Well, you know, they are not going all out, they don’t care,” and all of that. The thing is, they do care. Because you know what? When, when you are out there and millions of people are watching you, you don’t want to be embarrassed. And I think that is….a very strong component to why the level of play in sports, I think, in my mind - and I have watched it for a long, long time - is, is greater than ever right now. People don’t want to lose. You know that millions of people are watching. And you know you are going to hear from your family and your friends - and a lot of other people - if you don’t go all out, and if your team loses. And I think, I think that serves as a tremendous impetus for these people. And so, yes, it’s a matter of “Hey, you know, we can make millions and millions of dollars by playing these games,” but on the other hand, it’s not just that. And if they don’t go all out, and if they don’t care that much about winning, it won’t be very much longer before they are not making millions and millions of dollars and looking for a regular job. And they don’t want to do that.

CNBC:
I mean, don’t you think the viewers can tell that the team is playing to their potential, or if they are Playing a straight game, or if they are playing with all their heart?

AL MICHAELS:
I think a lot of fans watch games with their hearts. And they watch with their eyes, but they really watch with their hearts. And, and, and if, you know, they can break your heart. I mean, if your team is losing, if you perceive that your team is not going all out, if you perceive that there is an issue that you know can be resolved, you get frustrated and you get angry and, and you get upset. And you Start watching it with your heart. But a lot of people… You know, you have to watch it with your eyes. Investing is the same thing. I mean, you can, you can invest with your heart. You can say, “You know what? I wish this stock is going to go up,” or “I want this company to do well,” and all of that, and you might have an emotional investment. Maybe you go into a store and you love the store and you think the company is going to do well - and thus, you might invest in it. But for some reason, you know, you are not really looking at what’s happening. Maybe you have had a good emotional experience in there. But it’s very much like sports. You have to understand, there are two things to look at things. You have to look at it with your heart, but you also have to look at it with your eyes – and that means, you know, from your eyes to your brain, and make your decisions predicated upon that.

CNBC:
What about expansion of sports to different industries - the video game industry and fantasy sports? Sports isn’t just about that one game anymore…

AL MICHAELS:
The world of sports is not just what takes place in a stadium obviously. It’s, it’s national television for so many games right now. It’s expanding it to the video game world. Luxury suites are so important too. It becomes a case where, you know, a lot of…a lot of teams can sell these luxury boxes for a ton of money, and some of those people who show up won’t even be watching the game; they are there because it’s a party. So I mean, there are a lot of ways that, you know, that sports has Come, has come into society and, and plays out… from the rabid fan to somebody who could give a Damn about what’s going to happen in terms of the game but just wants to be a party to an event and Be able to go back and say, “You know, I went to that game last night,” even though he or she might Not have watched two minutes of it. But I think what’s happened in sports - just like everything else - I Mean, there is the globalization in business, the globalization aspect, and sport is looking to do that As well. I mean, the National Football League for years has played a number of preseason games in places like Mexico and Germany and England and Spain, and now they are even playing regular season games on an annual basis in London. And you know, and looking if they can eventually to expand to China. The National Basketball Association obviously very, very big internationally. Huge in China, just Yao Ming’s presence alone - as we saw during the Olympics - is, is extraordinary. Baseball, of course, with a connection to the… to the Far East and obviously to Japan. That’s been Going on for a number of years. So I mean, all sports want to become global sports, because that’s just another way to expand the market…you know, tap more revenue streams and all the rest. So the one thing about sport - it’s very much like a lot of other businesses - they are always looking for ways to generate revenue.

CNBC:
In a similar way, you can play markets internationally, invest internationally, and watch the markets globally.

AL MICHAELS:
Yeah. It reminds me of, horse racing. And I love horse racing. And I used to have some friends Who couldn’t wait in the middle of the night to bet the tracks in Hong Kong, because those were the only tracks going. And so, I mean, those friends of mine are right now… I mean, not only are they betting the tracks in Hong Kong, but they are betting the Hong Kong market, and the Chinese market, and all of the markets around the world. And it’s become almost a 24/7 thing, or maybe a 24/6 thing. And most of the markets are closed on Sunday around the world. You know, there is Always action, there is always things to be interested in, there is always…there are always things to be followed, you know? And one of the great things for me living on the on the West Coast is, you know, at 1:30 in the morning, you know, I can watch CNBC International and I can watch Patricia Suarez reporting from wherever…you know, well, wherever she is in Europe at a particular point…and kind of get an idea as to how the American markets might open. So I think, you know, a lot of us have become consumed by what’s going on, because there is always action, and you want to be on top of the action. And there are times when I am - I am the first to admit it - when, if I am… and if I get up in the middle of the night, you know, and it’s 3:00 o’clock in the morning, and I have a choice between trying to go back to bed or just turning on the television downstairs so I don’t wake my wife up and seeing what the futures look like, I’ll opt for looking for the futures.

CNBC:
Is it the drama? Are you just addicted to the action, whether it’s a sport game or a financial game?

AL MICHAELS:
You know, it’s a funny thing. I think…I think a lot of people started out - and, and probably like me and you, you get into investing and you start to pay more attention to it. And then you realize, I mean, this is an ongoing thing, it never stops. And whether it’s an addiction or not, I don’t know, but you… You know, you, you don’t want to be caught short; you want to be on top of the situation, and you want to be among the first to know what’s, what’s happening. And we kind of live in a world right now of breaking news - and everything seems to be breaking news. And you don’t… We want to make sure that, that you are on top of whatever the “breaking news” is. Now, a lot of it is not really “breaking news” to the extent that it’s going to really matter to you. But the fact that it’s happening, you know? You want to know first. You don’t want to have somebody say, “Hey, did you see what happened?” like four hours ago. No. You almost feel like you are back in the 19th century if that happens in today’s day and age. So I think it’s a matter really of, of…the excitement of it. The Excitement of it is tremendous. The excitement of the business world…the excitement of investing, I Think, is so pervasive right now…that, I mean, to me, and a lot of people that I know, and a lot of my friends…You know what we hate? We hate the three-day weekend. We hate when the market Closes at 4:00 o’clock Eastern Time on a Friday, and it’s not going to open up until 9:30 A.M. on Tuesday. We hate that.To me, you know, the market should be open 24 hours a day, 7 days a week. And I know a lot of people on Wall Street are probably throwing up right now, because they would have to work about 10 times as hard. But you know what? You can’t… It’s almost like being a sports fan in that regard. There are people who do nothing but watch sports. They can’t wait. And they watch things like the NFL Network, which is dedicated to football, football, football 24/7/365 days a year. And I think a lot of people who are into investing can’t get enough of it. And, and you could watch it on an - oh, on Like an every minute basis.

CNBC:
Well, there is nobody really closer to the action than you are in sports…

AL MICHAELS:
One of the things that CNBC does so well is, is not only break news, but then you get the analysis. And, and the people are so good. I watch David Faber and Joe Kernen and Charlie Gasparino and Maria Bartoromo, and they come in and they analyze it for you, and they kind of do it on the fly. And it’s great, because you know, you are hearing something and you are going, “All right. Now what does? That mean?” And then you need interpretation. And I think that’s where CNBC really excels. “OK, That’s the story, what does it mean?” And that’s another reason why, you know, I am always CNBC. I want to know… “Tell me…tell me the ramification of this - short-term, long-term. Important, not so Important. Tell me what it is.” I need it to be analyzed and and interpreted and, and spoken to me in a plain English kind of way so that I can understand it, and people who are not in the middle of Wall Street can understand it as well.

CNBC:
What is the tie between the trader and the sports fan?

AL MICHAELS:
Sports fans love action. Investors love action. It’s really simple. I think the parallels are tremendous. And people are fans because it’s exciting, and you have a rooting interest. It’s the same thing in Investing - it’s exciting, and you have a rooting interest. So I don’t know too many investors who Aren’t sports fans, and I don’t know too many rabid sports fans – who really understand what’s Happening - who don’t love the world of business, or at least want to learn more about the World of business.

CNBC:
Even if it was a losing team, there is always tomorrow…

AL MICHAELS:
OK. That’s right. Absolutely. And that is the truth. Every day is a new day. OK.