Ariel Chairman & Co-CEO John Rogers Talks Small Value Companies

Summary

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Podcast Summary: Bloomberg Talks

Episode: Ariel Chairman & Co-CEO John Rogers Talks Small Value Companies
Date: October 11, 2025
Host: Bloomberg

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Episode Overview

This episode features a rich conversation between the Bloomberg host and John Rogers, Chairman and Co-CEO of Ariel Investments. Rogers shares insights into the often-overlooked world of small value companies, the outlook for the entertainment sector post-pandemic, dealmaking trends, and his views on the evolving political and economic landscape. The discussion weaves through current market volatility, the impact of U.S.-China tariffs, and the recovery narrative of Chicago.

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Key Discussion Points & Insights

Market Volatility & Political Tensions

• Backdrop: The episode begins against a backdrop of sudden market downturns attributed to renewed U.S.-China tariff fears and unpredictable White House messaging.
• "[Markets] are hitting fresh session lows as we speak. …the biggest one day drop since…April..."
  — Bloomberg Host (00:36)
• The conversation sets the scene for Rogers’ insights by mentioning President Trump’s social media activity and China’s responsive measures on trade, raising fresh concerns for investors.

Investing in Small Value Companies

• Rogers highlights the current neglect of the small value segment, contrasting it with attention showered on mega-cap growth stories like Nvidia and Apple:
  • “They really have been ignored. They’re kind of the ugly ducklings… The little mundane businesses that we’ve invested in for 42 years just seem particularly orphaned these days. So we’re seeing great ideas and excited to be doing the research.”
    — John Rogers (02:04)
• Key Takeaway: Rogers remains bullish on the long-term prospects of small value stocks, viewing the current market sentiment as presenting compelling opportunities.

The Changing Face of Entertainment Investment

• Post-Covid, Rogers observes a persistent appetite for live, communal experiences:
  • “The next generation…love experiences. They want to go out and be together…to watch a ball game, watch a movie, go to a concert…”
    — John Rogers (02:47)
• He points to innovative venues like the Sphere as examples of how intellectual property and immersive venues can drive new waves of attendance and revenue.
• Speculation about future event themes—“Maybe one day, you know, it could be Star Wars, maybe it could be Harry Potter. You never know what could be next…”—shows the sector’s evolving potential.

Paramount’s Growth and Industry Consolidation

• Rogers discusses Ariel’s investments in entertainment, notably Paramount, expressing belief in its latent value but doubts about its near-term growth given heated competition.
  • “That’s still an open question. …you’re competing with Netflix…Apple and Amazon, etc. And whether you can grow in that environment is something that’s really still an open question.”
    — John Rogers (04:12)
• On possible mergers like with Warner Brothers Discovery:
  • “It brings scale… huge synergies… extraordinary amount of cost cutting that's there. I think there’s this real potential…”
    — John Rogers (05:21)

Chicago’s Recovery & Civic Leadership

• Addressing negative national narratives about Chicago:
  • “The city has never been more beautiful… the safety issues are drifting away, the violence is going down... Mayor Johnson’s done a great job. JB Pritzker has done a great job… our business community, our civic committee… have come together and we're…on the way back. Things are great.”
    — John Rogers (06:25)
• Notable: Rogers emphasizes community collaboration and recent improvements, directly pushing back on “the ire out of the White House.”

Tariffs, Market Stability, and Exposure

• The unpredictability of U.S.-China tariffs remains a central concern for Rogers, especially for small and mid-cap stocks exposed to global trade (e.g., Mattel):
  • “None of us that work in the markets day to day like to see the volatility… we’re looking for stability and this is kind of a fragile atmosphere… Having these challenges domestically around the tariffs is something I think is really problematic.”
    — John Rogers (07:42)

Deal-Making Resurgence

• Rogers is upbeat about the increased pace of mergers and acquisitions:
  • “This is going to be a great time for more and more deals to happen. …this regulatory environment is so much more friendlier for acquisitions and mergers… I think you’re going to see one deal after another.”
    — John Rogers (08:28)
• He credits less regulatory resistance and strategic opportunity as drivers for continued activity.

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Notable Quotes & Memorable Moments

• On Small Value Stocks: “They really have been ignored… seem particularly orphaned these days. So we’re seeing great ideas and excited to be doing the research.” — John Rogers (02:04)
• Experiential Consumption: “Live audience…is something that is really, I think, here to stay. The momentum is continuing to hold.” — John Rogers (02:47)
• Media Industry Consolidation: “It brings scale, as you suggest. …extraordinary amount of synergies…extraordinary amount of cost cutting...” — John Rogers (05:21)
• On Chicago: “The city has never been more beautiful… the safety issues are drifting away, the violence is going down...” — John Rogers (06:25)
• Tariff Concerns: “We don’t like to see the volatility…we’re looking for stability…Having these challenges domestically around the tariffs is something I think is really problematic.” — John Rogers (07:42)
• Dealmaking Outlook: “This is going to be a great time for more and more deals to happen… I think you’re going to see one deal after another.” — John Rogers (08:28)

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Timestamps for Key Segments

• Market Selloff/Political Backdrop: 00:22 - 01:50
• Small Value Investing: 02:04 - 02:31
• The Future of Live Entertainment/Events: 02:31 - 03:47
• Paramount, Media Growth, M&A: 03:47 - 05:59
• Chicago’s Narrative & Civic Leadership: 05:59 - 07:10
• Tariff Risks for Mid-Cap Stocks: 07:10 - 08:05
• Outlook for Dealmaking: 08:05 - 09:14

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Conclusion

John Rogers delivers a thoughtful exploration of overlooked small value equities, the enduring demand for live experiences, and the complex mix of risk and opportunity in today’s media and investment environment. He offers hope for both Chicago’s resurgence and America’s economy, while remaining pragmatic about the headwinds posed by policy and global tensions. His insights are candid, forward-looking, and grounded in decades of market experience—making this episode a must-listen for investors and observers alike.

Transcript

[John Rogers]

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[Bloomberg Host]

Bloomberg Audio Studios Podcasts, Radio.

[Bloomberg Analyst]

News It's pretty amazing how quickly and how dramatically sentiment shifted. Romain. Yesterday we were talking about the Buy everything rally. And now, as you say at the top of the show, everything that has a risk profile is being sold right now.

[Bloomberg Host]

A bit of a sell everything rally. In fact, we're hitting fresh session lows as we speak. And I just want to point out, Katie, I mean, we talk about the superlatives in this market for most of the major indices. We're talking about the biggest drop, one day drop since, well, April, which of course is right around the Liberation Day agita that sort of bubbled up and then it just seemed like the last few months it just kind of people forgot about tariffs, or at least they were comfortable with where the tariffs were until we got a truth social post earlier this morning.

[Bloomberg Analyst]

That's the thing. The noise had definitely been turned down when it came to the tariff conversation. Now, of course, coming back in a big way, you have the truth social post from President Trump there right now, basically saying that he's not even sure if he's there's a reason to meet with President Xi in two weeks. And a lot of hopes had been pinned to that conversation.

[Bloomberg Host]

Yeah. And in fairness to the president, I mean, as you know, he does fire off these missives kind of on a whim. But we should point out that China has actually taken a lot of measures over the last few days. I mean, in fact, the last few hours, including more restrictions on the export of rare earths, potential investigation, antitrust investigation into Qualcomm, and a couple other things that I'm forgetting. So there's been some concern here that China itself has kind of ratcheted up the pressure and maybe that's why Trump felt the need to do it. You know, I had his chance to sit down with John Rogers.

[Bloomberg Analyst]

I heard about that.

[Bloomberg Host]

Yeah, he runs co founder Aerial Investments. And I actually had a chance to talk to him about a wide range of things, including his thoughts here on the tariff picture. Take a listen as to what he had to say.

[John Rogers]

We're still finding ideas in the small value space. You know, they really have been ignored. They're kind of the ugly ducklings when you compare it to in video and Apple and all these giant, exciting growth stories, you know, the little mundane businesses that we've invested in for 42 years just seem, seem particularly orphaned these days. So we're seeing great ideas and excited to be doing the research. I think there's real opportunity for small value.

[Bloomberg Host]

Do you see a broader future for investment in that sort of entertainment space? And I guess it's more, given what the sphere and MSG do, it is a little bit more of a hybrid entertainment space. But I am curious as to what additional value you find there.

[John Rogers]

Well, everywhere we go, you know, we talk to as many experts as we can as part of our regular research and due diligence. And everyone is saying, you know, post Covid, it really is sticking that the next generation of citizens here, particularly in America, love experiences. They want to go out and be together to watch a ball game, watch a movie, go to a concert, go to an outdoor stadium to see music. It's something that is really, I think, here to stay. The momentum is continuing to hold. And so places like the sphere that have this, you know, magical ip, people want to come and experience it together. And I think it's really special. I think the wizard of Oz is just scratching the surface. It's absolutely amazing and exciting to go to, but there will be other exciting, amazing things. Everyone speculates, well, maybe one day, you know, it could be Star wars, maybe it could be Harry Potter. You never know what could be next. But those are the kind of things that people want to come in and appreciate in a live audience.

[Bloomberg Host]

You're no stranger to investing in the entertainment space. And at least prior to the tie up with Paramount, Skydance, you were one of the largest shareholders in Paramount. Now that that deal is done, now that David Ellison has laid out his vision for what he wants to do with that company, I am curious as to whether you think that it can be not just profitable, but also a growth story again.

[John Rogers]

Well, that's still an open question. You know, it's been a torturous experience. I still think for sure there's a lot of value there. You know, Paramount Studio is valuable. CBS is valuable. They're still number one year after year with their content. You look at all the different things. And of course, Paramount plus and Pluto, they have these extraordinary assets. And so the stock, I think is still, you know, significantly undervalued. Now, whether they can get the growth they hope to your question, that's, that's still an open question because you're, you know, you're competing with Netflix, you're competing with all the big guys, Apple and Amazon, etc. And whether you can Grow in that environment is something that's really still an open question. I think Mr. Ellison has the right idea of, you know, building scale, you know, building ip, making these acquisitions that can really add value and hopefully potentially add significant growth from revenue and profitability.

[Bloomberg Host]

To that point on scale. Does a deal like one for Warner Brothers Discovery, should that actually come to fruition? Does that seem smart to you in terms of the cost and what it would actually bring to Paramount?

[John Rogers]

Well, I've been reading an awful lot about it and talking again to as many experts as possible. I think that acquisition makes a lot of sense. It brings scale, as you suggest. It'll make them one of the major players that will be there forever. And at the same time, there's huge synergies, you know, huge cost cuts that are available. You have two major studios, maybe you could sell one of the studios and studio lot and all the real estate value that's there. But also just again, extraordinary amount of synergies that are there, extraordinary amount of cost cutting that's there. And we put it all together. I think there's this real potential of a merger like that would happen.

[Bloomberg Host]

I do just have to ask you just about the political climate because that's sort of driving some of those divisions these days. And I know in the past you've said that you're still hopeful for America, so hopeful for our economy and our in our markets. But when you look at what's going on, particularly in the city where you sit, where Ariel sits in Chicago, which has been the subject of some of the ire out of the White House, what do you make of it?

[John Rogers]

I just think it doesn't make any sense at all. You know, the city has never been more beautiful. It's never been, you know, the safety issues are drifting away, the violence is going down. You know, we've had extraordinary leaders here who've worked to build our city back from times where it was somewhat troubled. But we know Mayor Johnson's done a great job. JB Pritzker has done a great job. You know, former Secretary of Education Arne Duncan with his CRED program, the anti violence initiative have made a major difference. And our business community, our civic committee headed up by Derek Douglas, everyone's come together and we're fully on, on, on online, together. We have the same perspective that our city is really on the way back. Things are great.

[Bloomberg Host]

We got additional headlines out of the White House with regards to tariffs, potentially more tariffs on China, largely because the president says that he doesn't think Xi Jinping is cooperating enough in the negotiations. Being a small and mid cap investor, particularly with some names that I would assume would have tariff exposure like Mattel. Does it give you a little bit of concern that we still have not sort of, I guess, reached some sort of resolution on where we're actually going with these tariffs, what they will be and what we can count on them to be?

[John Rogers]

Well, none of us that work in the markets day to day like to see the volume. We don't like to see the volatility, we don't like to see the surprises. You know, we're looking for stability and this is kind of a fragile atmosphere with whatever's going on around the world, all the challenges we face. Having these challenges domestically around the tariffs is something I think is really problematic.

[Bloomberg Host]

We've also seen a revival in dealmaking, John, that we didn't necessarily see definitely coming out of last year and at the start of this year. You are Ariel, and your funds are investors in names like Carlyle, Lazard and a few others. I am curious as to whether you think the current uptick that we've seen in deal making is actually going to continue and even potentially expand. Expand?

[John Rogers]

I think it will continue and I think it will expand. As we've had a chance to talk to the management teams at both Carlyle and Lazard, you feel like the momentum is building. This regulatory environment is so much more friendlier for acquisitions and mergers. I was talking to a great leader yesterday of a big brokerage firm and they were just saying how this is going to be a great time for more and more deals to happen. I just can't overemphasize that. When you see the opportunities both for companies to make strategic acquisitions, that it's not going to be questioned by the Justice Department or the FCC or the other regulators are out there, the FTC and the rest. I think you're going to see one deal after another.

[Bloomberg Host]

John Rogers, the co founder and chairman of Ariel Investments, a wide ranging conversation. His investments in the small and mid cap space, the state of the economy, the state of Chicago and the state of those trade tariffs.

[Akshat Ratty]

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[Bloomberg Host]

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[Bloomberg Host]

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