Abacus: Small Enough to Jail

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From Cool Global Headquarters, this is Motleyful Money. It's a Motleyful Money Radio Show. I'm Chris Helen joining me in studio this week from Hidden Gems. Seth Jason from Million Dollar Portfolio, Jason Moser, and from Total Income.

Ron Gross. Good to see you as always gentlemen. Hey! We've got the latest headlines from Wall Street.

Award-winning director Steve James is our guest and as always we'll give you an inside look at the stocks on our radar. But we begin with the retail sector. Bad earnings reports from a cross-section of mall-based retailers had investors asking about the future of the entire industry. Macy's, Nordstrom, Coles, and JCPenney all reporting this week, Seth.

And we're not going to go through them one by one. But when you look at this from the proverbial 50,000-foot view, this does not look like a bump in the road. This looks like a shift. You're in the mall.

You're in trouble. People aren't shopping in the mall. And it costs a lot to rent pieces of the mall, especially when you're one of those big anchor tenants. But the smaller retailers and malls are also feeling the pinch.

So Ron said it best during the production. He was just going to paraphrase him. Most people know this. How much stuff you are listening?

How much stuff are you ordering online? The answer is a lot. And restaurants are seeing the same thing. People want to blame millennials, but it's everybody, especially millennials, don't want to talk to people face to face.

They want to order takeout. They want to order lots and lots of stuff. I know. From online stores.

And it may be a giant one like Amazon. It may be smaller specialists. But if the stores aren't being filled, you're getting crushed right now. And this is what's happening.

And there's really not a whole lot that's going to change it. I think that in some places, like here, you've seen a shift to town centers. So somebody like Target, who's willing to move into a town center for folks who may not have them, is almost like an inside-out mall. It's got maybe a couple of big anchor stores.

It tends to have some nice smaller specialty places, nicer restaurants. But they also mix in townhouses and stuff so that the tenants, the business tenants who are there, can count on foot traffic. And those are doing really well across the country and in the DC area. Anybody who can adapt their model to online sales or town centers is probably going to survive.

Anybody who's stuck in the mall is going to be gone. Well, since Seth paraphrased me. Let me paraphrase Seth paraphrasing me. Of course I agree with that.

We're in the middle of a change in consumer buying patterns. And as you said, it's not a trend. It's a permanent shift. And as a result, as a result of technology, slash Amazon, there are just too many retailers out there, especially when you look at the department stores with specialty retail to in certain sectors.

They need to stumble out of business. It's just the way it goes, sorry to say. Some need to go out of business. The rest need to pare down their footprint.

They need to focus on what's called for wall profitability. Each store, in and of itself, needs to be profitable. Otherwise, it needs to be closed. And then these companies also need to invest in their online experience because some of these huge multi-billion dollar department stores have terrible online experiences.

I'll tell you what all this sort of begs the question. Is it because I do agree there is a surplus of retail out there and there are plenty of operations that the world just doesn't need if they disappear tomorrow? Our lives would not really change. But what is going to happen all about real estate?

That is, I think, sort of the big question. We talked about Radio Shack before and how perhaps Amazon would jump in there and use that as some type of peace in their fulfillment puzzle. I think more and more will probably see stuff like that happen. The smart retailers figuring out ways to perhaps use the physical presence to help sort of evolve their logistics in getting products from point A to point B.

Now, Amazon obviously is really the king out there as far as it goes in logistics. But I think there are a lot of businesses out there that are learning from what Amazon has done. Wayfair, I think, is the easy example. And we've seen where Amazon is looking to make this big push into furniture and sort of the big question.

Is that going to be the death blow for Wayfair? I mean, I don't know that necessarily is because Wayfair is a business that was built on that e-commerce model. I think more and more businesses that start with that in mind are going to be okay. It's these businesses that have been around really for our entire lifetime.

They are still married to very old school thinking, I think, in a lot of cases, which is really going to cost them. But to go back to something that Seth touched on in terms of the town centers, I mean, we live in the Washington, D.C. area. If you live in a small town or not even a small town, a smaller city, you're still dependent on a lot of bricks and mortar retail.

And it's going to be, I think, one of the many things to watch in all of this is when does the shift take place for sort of the smaller towns and to your point, like what does happen to all of that real estate? I think in the smaller towns, probably Walmart has already taken out a lot of the really mom and pop stores. It's kind of the mids and the suburbs where they're really having these growing pains. And one of the other things that can happen to malls, and I think it's happening, is it Landmark here in Alexandria?

And now I'm just going to be knocked down and turned into a town center. I mean, they're just going with this completely different model. And one thing we saw earlier this week, Coach buying Kate Spade for almost $2.5 billion, I'm curious, Ron, for investors who are looking at retail, is this something we should expect to see more of? Yes, some of these are going to go out of business.

But some of the, you know, in the case of Kate Spade, I think Coach looked at that and saw a pretty good value. And I'm wondering if we're going to see more consolidation. I do actually like that acquisition. I agree with you.

And yeah, usually when you see paradigm shifts, that two things happen. Some go out of business and then the rest consolidate. The investment bankers love it. And then five, ten years later, we go through another shift and they get to break them up again.

But I would expect to continue to see, especially the little guys get gobbled up by some of the bigger folks to kind of shore up the business, drive profitability and growth. Yeah, and you might have a little more hope for specialty retailers with a decently strong brand. But if all you are is, I mean, Sears, and everyone knows who these are, but they really don't have their own stuff, JCPenney. I don't know what the future is for them, except bye-bye.

This week's SNAP issued its first quarterly report as a public company. And the reaction from Wall Street was one of abject horror. SNAP lost more than $2 billion and user growth was weaker than expected. And Jason, you know, Evan Spiegel, finding out this week something we've said on the show before, running a public company, harder than running a private company.

Sure. Cue the ephemeral profitability jokes. I mean, it gets really, that's not applicable here because there's no probability to begin with. Not that that's any real surprise.

I think they have ways to go to actually get there. I think the good news for SNAP at this point in time, this was the first call. And they have an opportunity to learn from their mistakes and to get better. I think the bad news is pretty much everything else about that call.

I mean, I've got a lot of time to do it. I really, this is one where you don't want to read the transcript. You want to listen to it and see sort of how this team sounds, how they work together, what they're talking about. And I don't know that Evan Spiegel does himself any favors by trying to hold his cards so close to the vest.

And that ultimately is kind of what you got from this. It was number one, I think, that he's probably fallen a little bit for his own hype. And number two, he's not really willing to give up so much information as far as plans for the company of roadmap, the profitability, products, they have features, whatever it may be. And so the market, essentially, everybody's going to suck here wondering, okay, what exactly is this business and what kind of growth can we expect from it?

Because certainly the numbers were less than everyone was expecting. I mean, when it comes to revenue growth, when it comes to user growth, I mean, there are some big questions here. And it's reasonable to assume that they're going to have some issues getting there because SNAP chat is sort of a niche platform. And so the really bad news for investors, even after this big sell-off this week, is that the stock is still absurdly overvalued by virtually any measure.

I mean, if you look at it just from a price to sales perspective and we can't look at it from a price to earnings because there aren't any earnings yet. I mean, the stock is still trading at 41 times sales. And to put that perspective, Twitter is trading at less than six, Zillow is trading at less than nine. And these are two businesses also very, very much internet-based, non-profitable businesses.

So I think those are pretty good apples and apples and parisons here. The expectations on SNAP right now are just absurd. And so I fear that investors who are thinking, oh, we'll just wait this out or maybe buy on this dip. I really don't see a scenario where this stock doesn't get cut in half from today's level.

It doesn't, SNAP doesn't really, I don't think, pass the what would happen if it were gone tomorrow, test that we talked about what some of these stores would be a little upset. My kids would be a little upset. They'd get over the next day. There's a Facebooker and chat on their iPhone or whatever.

I mean, yeah, they've got a pretty big user base, but what they're selling is not really anything all that differentiated. I hate seeing them miss and report to disappointing numbers so close to an IPO. I mean, the road show was just like a minute ago. And the guidance to the street was a minute ago.

And then to come out and say, yeah, I guess our visibility wasn't that good. It's just disgusting to see the stock get hit like this, which is appropriate. It should never have an evaluation in the first place. It's just not appropriate.

Yeah, I don't want this to be just some kind of a gang up on Snapchat and let's just come up with that. I do think that there is potential there. Okay. I mean, obviously they've built up something that a lot of people either like to use.

It's core function though, as a messaging app is very replicable, right? And we've seen Facebook put up sort of copies of that and do pretty well with it. So I think the key for Spiegel is going to be number one learning how to behave as a CEO. I mean, 26 years old.

I remember when I was at age, you kind of think, you know what, obviously he doesn't. He's going to figure that out as he goes along. But I think the other sort of question that he's being answered is what else are they going to become because they can't just be Snapchat. They've got to figure out a way to be special, to be unique, to offer something that no one else does.

Glasses. Camera glasses. Nice move. I think the big thing is that when we shake up in the boardroom, Whole Foods announced five new independent directors and that private equity executive Gabrielle Salsberger will become the new chairman of the board.

CEO John Mackie is on our board here at the Motley Fool. And Ron, I'm not saying Whole Foods couldn't benefit from some fresh thinking, but I wasn't expecting this. Well, you know, they were under attack by John Apartner's Barry Rosenstein over there, activist investor, pretty good guy actually and a good investor. So they took this move to kind of combat that.

So I wasn't that surprised. They put some good guys Panerich CEO on the board. I think it was necessary, right? The business is just not doing well.

Seven consecutive quarters of negative comps. I do like the move to that smaller concept, the 365 concept, but there's only four of them. But they're hopeful and we'll see how the rollout goes. New blood on the board is great.

Janet is saying we could have used some grocery experience, however, and that we did not get. You got Ron Shake who just took Panerich private. You have a private equity chairman of the board now. Do you think this increases the likelihood that Whole Foods is going to put itself up for sale in the next year or so?

I think, you know, also the founder of Morningstar is on the board. They'll help facilitate offers and look around out there. I don't think we'll see that anytime soon. I think they say independent.

Trip advisors profits came in nearly 30% lower than a year ago. It sounds bad, Seth, but it's also kind of what everyone was expecting. Yeah, the stock didn't seem to move much the day of the news. I haven't seen it from the next couple of days.

But the story there doesn't look great if you're talking about a tech company. You got revenue up to 6%. Hotel revenue up 4%. Click revenue up 12%.

But it's really the trajectory you need to look at. And a lot of the metrics that investors have been worried about, like average revenue per hotel shop or a finely sort of trending back up. And the reason they were down in the first place was that Trip Advisor has been reinventing itself over the past couple of years. They've already started a new search project called Medicine a while ago.

And now they're doing instant booking and they have hotel partners. Most are all of the major hotel chains right now. And the reason, so this is actually a new business for them. And it cannibalizes the old business and in the beginning it monetizes less.

People are also moving to the phone, which is a platform that's much more difficult to monetize. And the move Trip Advisor is making, I think, are the right ones to monetize the mobile platform. But there are growing pains. And so it looked actually like they've made some meaningful progress on that.

But it's tough when Wall Street would sort of rather see the profit levels that you were making a few quarters ago. And here in hockey terms skating to where the puck is going to be. Coming up, we've got a couple more earnings reports and a few stocks on our radar. This is Monica.

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Welcome back to Motleyful Man, Chris Hill here in studio with Seth Jason, Jason Moser and Ron Groves. Shares of Marriott hitting a new all-time high this week after a strong first quarter that featured higher room rates and higher occupancy rates. These people really seem to know how to run a hotel, Jason. Yeah, and I got to say I'm a little disappointed because we've got this on the watch list in MVP and we're hoping to be able to add to it this quarter.

But it's just not working out for us. We were thinking there may be some reasons for caution there given the volatility here in potential travel restrictions and whatnot. But their Rev Power Growth revenue per available room still firing on all cylinders is wrong with say. It looks like the rest of the year is going to be that way as well.

They're going to spend about $7 billion over the next three years and repurchase is giving a lot of money back to shareholders. These guys really know what they're doing. It's a I think a good holding. The transition to digital downloads of video games appears to be going well for electronic arts, fourth quarter profits big on Wednesday and for that matter Ron, so what's the stock?

You like profits Chris? I did. Stocks up 640% over the last five years and they keep getting it done. 60% of revenue now comes from digital downloads.

Pre-taxing come up 36% FIFA 17 doing great. Battlefield 1 first person shooter game doing great. Increased guidance, $1.2 billion share buyback stocks on a roll. You know Ron rattled through that stuff like he played those games.

My son plays those games and I sit there and I'll. Alright, let's get to the stocks on our radar this week and our man behind the glass Steve Brittle will hit you with a question. Ron Groves here up first. What are you looking at?

I got a recent total income recommendation Oak Tree Capital, OAK. They're an investment management firm founded by Howard Marks back in 1995. A really enviable track record. They operate in alternative markets.

Nice upside to the stock I think and they have a 6.3% dividend yield that looks pretty safe to me. Nice and juicy yield there. Steve, question about Oak Tree Capital? How would I describe Oak Tree to a friend?

They manage money for big pension funds insurance companies through closed end funds, open end funds and different investment vehicles. Seth Jason, what are you looking at? Okay, everyone likes yoga. Wait, wait, wait, wait.

Everyone likes yoga. Working out, right, going to the gym, doing the soul cycle kind of a thing or the spin or whatever it is I'm saying for getting sued anyway. The company is MindBody, MB and they provide a cloud based solution for people in that business to run the businesses to book the appointments. In addition to providing the software, they also have a marketplace that lets you get rid of the appointments that you're not filling.

Do some marketing. They've got a partnership that just came online with Google to help fill these slots. They're not yet profitable, but they're sort of on the cost and they're growing pretty quickly. Steve, question about MindBody?

Is there a one stop shop for this service for all businesses in this, I mean, hair salons where you're booking people? Is there a thing when you're on that space? That's the thing. Nobody really does and these folks are making an attempt at it.

There's a lot of smaller and bigger companies that kind of own pieces of it. They're one of the first ones to try and do it all. Jason Moser, what are you looking at? Sure, looking at wage works, ticker is W-A-G-E.

They just reported they pretty good first quarter here and this business administers consumer direct benefit programs like Flex Health's health spending accounts and commuter benefits and whatnot. They got a good first quarter. They have a good pipeline of business here coming down the line for the rest of 2017. Big contracts with the US government which never really hurts and they've developed some very interesting partnerships with Lyft and Uber to really help stoke some growth in their commuter benefits line of business.

Generally speaking, it looks like they do a pretty good job at what they do, pretty healthy margins, profitable cash flow positive, a lot of reasons to like this business. Steve, question about wage works? It seems like corporations are always trying to spend less on things like employee benefits. I think corporations are trying to figure out ways to get their employees to prepare for things like this more so and that's why employers will tend to offer these types of programs.

I think that's one of the bigger challenges that Steve is getting the employees to actually sign up for them and understand how they work. Got a stock you want to add to your watch list, Steve? I'm going with a yoga one. Come on, fix.

What was the last time you were in a shop like that? A few weeks ago, I tried yoga. It was pretty cool. Not a lie.

True story. How do you have to see thanks, Chris? Thanks, Chris. Up next, the director of Hoop Dreams is back with a brand new documentary.

Every investor is going to want to know about it. Stay right here. This is Motley. I'm talking about Motley.

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In the wake of the 2008 financial crisis, only one bank in the United States was charged with mortgage fraud. It was not one of the big Wall Street banks, whose names are commonplace for investors. Instead, charges were brought against Abacus Federal Savings, the 2,651st largest bank in America. Abacus serves the immigrant community in Chinatown in New York City.

The charges and subsequent trial are the subject of the new documentary film, Abacus Small Enough to Jail. And it is the latest film from award-winning director, Steve James, who joins me now from Chicago. Steve, thank you so much for being here. Great to be here.

I think you know what? They just dropped a notch this year. They're down to the 2,650 second part. We're going to get to the bank size in a minute.

But that is one of only a large number of amazing things in this movie. I mean, this is a legal battle, but it really is the story of Thomas Sung, a Chinese immigrant with a wife and four grown daughters. Thomas Sung started Abacus Federal Savings. In many ways, it's him and his family that are on trial here.

And I'm curious, how did you come to meet Thomas Sung? Yeah, well, that was worth it. My producer, one of the my producers on the film, Mark Mitten, who worked with me on other stuff, just happened to be friends with the family going back 10 years. And Mark called me one day right before the trial was beginning and said, you know, the family I know in New York runs a bank in Chinatown.

They've got this crazy trial about the start. And as he explained it all, it just sounded too crazy to be true. And he said, what do you think? I think they would be game for us to come and sort of document what they're going through for this trial.

And so we went and did it. If you think back, and I suppose there are remnants of this feeling today, almost a decade after the financial crisis, but certainly you go back to 2010, 2011, 2012, there really was a drumbeat for someone to pay for what had happened. And largely that was pointed at the big Wall Street banks. I'm curious, since you spent time with the district attorney in New York City, you spent time with the prosecution team.

Did you get any sense when you were filming this, that there was almost an over-eagerness to shine a spotlight on this case? Because that's one of the more interesting part of the films for me is just how big a spotlight the DA decided to shine on this case. And I'm wondering if on some level the DA's office said, you know what? It doesn't matter that this is a tiny bank.

We're going to make someone finally pay. Yeah, I think you're right. I mean, you know, when's junior of the DA of Manhattan announced the indictments? He said that this was the first prosecution of a bank by their office since 1991.

And he went on to say that this bank, the advocates that they were indicting, was connected to the mortgage fraud crisis of 2008. And the thing is, when you look at this, and the film does, what went on at Abacus had nothing to do with what it went on in 2008. And you know, as you learn in the film early on, is that Abacus discovered some low level, very petty fraud, going on in a couple of their branches. And they dealt with it and reported it.

So in so many ways, it's the opposite of the big bank. So I think Vance would tell you, when I interviewed him, he just said, look, we saw fraud, and we went after it. There was no other calculation going on here in terms of what dictated our decision to bring this to trial. But I find that hard to believe.

When you look at the way in which the indictments were announced, where they chained together low level bank employees, the current and former employees, and paraded them down the hall in front of the media. And he made a big statement of prosecuting this bank in the connection with mortgage fraud crisis. It sure seems pretty clear that they were looking for a trophy here. As you said, it's clear that things went wrong at Abacus.

They self-reported. They went through the process the way they were supposed to. But one of the things that comes to light is that in some ways, this is a crime without a victim. That one of the people you interviewed sort of compares this to the financial equivalent of J-Walking.

Is J-Walking illegal? Well, technically, yes it is. But is that a great use of resources? And again, it goes to the question of, boy, they really seem to dig in here on the DA side.

And I'm wondering if they had any sense, because this is one of, for lack of a better word, one of the more joyful parts of the movie, is Thomas Sung's family. And in particular, his adult daughters, three of whom are lawyers. I'm just wondering, did anyone at the DA's office realize what they were going up against? Because at least some of them had to think, well, this is open and shut.

This is going to be easy. Yeah, I think, and again, they won't admit this. I mean, I talked to Polly Greenberg, who was the head of economic crimes in the DA's office, who oversaw the case and Vance, as mentioned earlier. They weren't going to admit this.

But I think that they really thought that the bank would fold and not take this to trial. That they would plead guilty to a felony, which, you know, and that's another way in which this differs from the big banks. The DA's office did offer Abacus the opportunity to plead and get a fine. But they insisted that they plead to a felony.

You know, none of the big banks got that deal. The big banks were offered fines in lieu of any kind of conviction, which is another way of telling you that they wanted this conviction that that was what was important, you know, to have to make the mark. But yeah, it's, you know, it's just, it's just, it kind of boggled the mind when you think about what was going on at Abacus and the DA's persistence here. Because they started looking into this back in 2010.

They brought the indictment in 2012. That trial happened, which we covered in the film in 2015. This was a five year ordeal that the Sung family had to go through. And as you say, they really are the heart and soul of this film.

They are this incredible family. They're courageous. They're determined. And they're also very funny.

I think one of the things that's a prize for people when they see the film is how much humor there is in this film. Because the family has such a remarkable personality. It's really fantastic. You're absolutely right.

I'm glad you mentioned the humor. Because it's interesting to see that even though these are grown women dealing with their 75 to 80 year old father throughout the film, the dynamics of childhood still play out. Even though she's a lawyer and she's an adult woman, there are scenes where I'm the youngest of four in my family. But I just found myself both laughing at and sympathizing with her where she's talking and nobody's listening to her.

Exactly. And when we started the film, we hadn't met Mrs. Sung yet, Thomas's wife. And when she finally wasn't sure she wanted to be in the film, because this whole situation was so distressing for all of them.

And she felt like she had really lost faith, which is a very important thing in Chinese community. But when she finally contended to be in the film, then she pretty much steals the movie with her sense of humor. You mentioned the five years that this takes place over from the time that the investigation begins through the trial. Over that five year period, the bank is still making loans.

I think somewhere in the neighborhood of 3,000 loans and only nine default in that period. At any point did someone in the DA's office acknowledge, you know what? Maybe things would be better off in our overall financial system if the big banks on Wall Street operated on the same level that Abacus is. Absolutely.

I mean, I think it's a very important thing to do with the fact in the film. But Abacus's default rate on loans is 120th of the national average for banks. I mean, they know how to make loans. But the DA's office decided because there was no real default to focus on in this trial, they decided that the real victim in this trial was to be Fannie Mae.

And Abacus did, and now, again, does a lot of business with Fannie Mae because of the nature of a lot of the loans they do, which are two people of more limited economic means. Fannie Mae and Fannie Mae, the alleged victim, couldn't wait really for this trial to be over so they could get back in business with Abacus because they were such good clients for them. So, I mean, you know, if you made this up and put it in a fiction film, people would sort of laugh and say, oh, come on. That's not plausible.

But, you know, it did happen. And one of the things that was so remarkable to me and our team on this is that this is a story that no one was really reporting on in the mainstream media at all, including the venerable New York Times. They did exactly two articles on the entire trial, the spectacle of the indictment with the employees chained together in the verdict, which, you know, one of the pleasures I think of watching this film is that most people will come to it, have no idea about this case and what happened. And I'm just so glad that we had the opportunity to tell it.

Coming up, we'll talk with Steve about who dreams and the business of filmmaking. This is Motley Fool Money. Welcome back to Motley Fool Money, Chris Hill here in the studio talking with Steve James, director of the New Documentary, Abacus, small enough to jail. Film consumption has gotten easier over the last 25 years with DVD players and then the rise of streaming video, Netflix and Amazon Prime and Hulu and all that sort of thing.

What is filmmaking like over the last 25 years? Has your job gotten easier? Is it harder? Is it about the same?

Well, I mean, for me personally, it has gotten easier to make films than when I started out. And some of that is a function of when anybody is starting out in a field and certainly the field of film, when you don't have much of a track record, it's hard to get yourself established, it's hard to find funding. So that's changed for me. I'm one of those fortunate people, independent documentary filmmakers who have had pretty good luck with funding, although I raise money in every conceivable way imaginable over the years.

So in that regard, it's easier. And it's also from a technological standpoint, it's easier because when I started out, the technology wasn't so affordable. And if you didn't have money, you had to have someone who had that technology, the expensive cameras, the edit suites and such to help you make it, even if you had no money. So a lot of that's changed, which is why there's an explosion, I think, of filmmaking that's going on in this country, both documentary and fiction filmmaking.

So in a lot of ways, yes, for me personally, it's gotten easier. I think for the industry as a whole, there are aspects about it that are definitely easier. But because so many more people are competing for the dollars and for the screens and the opportunities to show your work, it's hard. It's still very hard because there's just so many more people trying to do it.

You're probably best known for hoop dreams, but you've done other sports films, No Cross Over the Trial of Allen Iverson, the film Head Games, which is about head-related injuries in sports. And while you do capture the drama within the games themselves, so much of your films with regards to sports are about the off-the-field stuff, the relationships between coaches and players, parents and their kids, teammates, the relationships between teams and communities. I'm curious when you are not working on those types of films, what kind of a sports fan are you? Do you actually enjoy sports?

Do you just kick back and enjoy watching a Cubs game? Or does the work that you've done over the last 25 years make you go, you know what, I'm going to spend my leisure time doing something else? Well, that's a really good question. I am still a sports fan, for sure, but the impact of doing the films I've done is certainly had an impact on my fandom, if you will.

The most acute example I can think of is when I did Head Games, the film that looked into the concussion crisis in sport. You know, I've always been a football fan, I've really enjoyed watching football, but it definitely impacted my enjoyment of that game in just this past football season. And it wasn't totally due to these issues, but I didn't watch a single football game last year except the Super Bowl, which I was really sorry I watched. So it's, you know, I have a hard time watching football these days without thinking about just how dangerous the sport is, and it's definitely impacted me.

When it comes to basketball, which is always my first love and my most still remains the sport I enjoy watching the most, I just don't watch as much anymore because I don't have the time. It takes a lot of time to be a sports fan. And I just don't have the time until I tend to be much more selective about when I tune in, and it tends to be like right now with the NBA playoffs, I'm watching now, because, you know, to spend the time watching an NBA season just seems like, you know, kind of a waste of time. I'd much rather read the sports page, and in a matter of minutes I get the gist of what's going on, and I don't have to spend two or three hours in front of the television.

And one of the things that I think hoop dreams did for a lot of people, not just basketball fans, but I think just viewers in general did was it sort of shined a light on not just the off-the-court stuff, but in particular the sometimes unseemly world of recruiting when it comes to high school and colleges. And I'm curious if you think that has gotten better since you made that movie, or if it's the same, or even worse? Oh, I think it's way more of a business now than when we made hoop dreams. I think when we made hoop dreams it was a bit of an eye-opener for a lot of people, including me, and my colleagues on the film, as much as we had played and enjoyed basketball, we'd never been part of that, that business aspect of it.

So yeah, back then it was an eye-opening revelation, you could say, but with the rise of the shoe company, AU team, sponsor teams, and the fact that colleges are now recruiting players as young as freshmen in high school and getting at least oral commitments from players as freshmen in high school. They're not binding, but still. I mean, it has exploded, and it makes the time when we were documenting it and hoop dreams look like a pretty polyanitime. Last question, and then I'll let you go.

Your previous documentary was entitled Life Itself. It's about the life and work of Roger Ebert, Billy Film Critic. I'm curious when you think about Roger Ebert now, what comes to mind? I'm sure you have any number of memories, but just whatever he pops into your head, what do you think of?

What I think about is, as he received at least in terms of the fact that he passed away back in 2014, he received from public view clearly, although he has a very robust website that his wife, Chaz, Ebert, has maintained. There's a real loss there. There's a loss in the world of film because he was such a remarkable critic who possessed that ability to write brilliantly, yet in a populist vein, that anybody could read and appreciate, no matter their level of sophistication about film. His love of film, and he kind of symbolized, in a way, I think he symbolized the film when it was the most sort of powerful and meaningful, at least in the broadest sense, art form, going.

And that may be changing now. I think television has grown. I think there's a real question about the future of art cinema, especially in this country. So his passing also marks the passing of a torch in a way that's kind of unfortunate.

And then the other thing about Roger is that he wasn't just a film critic. He was a true social commentator, both in his reviews and apart from his reviews. And I think we just missed that voice. Abacus, small enough to jail, opens next week in New York City and rolls out nationwide after that.

Steve James, such a pleasure talking. Thank you so much. Real pleasure talking to you. That's going to do it for this week's show.

Our engineers, Steve Roido, our producers, Matt Career. I'm Chris Hill. Thanks for listening. We'll see you next week.