The NFL scores big
In many ways, the NFL couldn’t have asked for a better outcome to the Super Bowl. There was a thrilling overtime victory that cemented the Kansas City Chiefs as the league’s youngest dynasty; a well-reviewed halftime show from Usher; a complete list of expensive advertisements; and of course Taylor Swift herself.
It was a powerful reminder of the Super Bowl’s unique place in the American cultural landscape and how it can generate billions for a giant sports league.
The game was a place to see and be seen. Yes, Swift arrived from Japan in time to cheer on her boyfriend, Chiefs star Travis Kelce. And A-listers like Jay-Z, Beyoncé and LeBron James were spotted at Allegiant Stadium in Las Vegas.
Also in attendance were corporate moguls, including Elon Musk – who saw a spike in activity on his social network during the game.
The game could set a record. The show, potentially supported by an army of Swift fans, could surpass the 115 million viewers who tuned in last year, making it the most-watched show in U.S. history. (Viewership for NFL games has risen sharply in recent years; the AFC and NFC championship games on Jan. 28 accounted for nearly 39 percent of the national linear television viewership.)
That would explain why advertisers were still willing to spend over $7 million for a 30-second spot during last night’s broadcast. (More on the ads later.) “In this era of fragmentation, the Super Bowl is what television used to be,” Brad Adgate, a veteran media analyst, told The Times.
The NFL could also benefit from its growing commitment to sports betting. Stakes were expected to exceed $23 billion. Not all of it was necessarily legal, but the level of interest perhaps validates the league’s interest in gambling, which has led to lucrative sponsorship deals with betting companies and, more importantly, increased engagement from sports fans.
All of this bodes well for the future of the league. The NFL is already set to make more than $125 billion over the next decade from selling broadcast rights to its games. Strong viewership allows the league to award games to streaming giants at eye-wateringly high prices.
That success is pushing NFL franchise valuations to record levels, and as DealBook reported this weekend, it will be high on the agenda at next month’s owners’ meeting, which will focus on giving institutions a chance to invest in Buy teams.
About the ads: Which one was talked about the most? Candidates included actor Michael Cera’s absurd CeraVe spot, Beyoncé’s stealth album announcement in a pitch for Verizon, and Ben Affleck’s latest appearance for Dunkin’ (starring Matt Damon, Jennifer Lopez and Tom Brady – which also appeared in a BetMGM advert appeared).
But a much-discussed ad for Cetaphil lotion drew criticism after a social media influencer said the premise was stolen from it.
Here’s what’s happening
Donald Trump is reviving concerns about his commitment to NATO. European leaders warned about the geopolitical risks of a second Trump term after the former president said over the weekend he would not defend some NATO members against an attack by Russia. But some aggressive Republicans, including Senators Lindsey Graham and Marco Rubio, refused to criticize Trump.
An aid bill for Israel and Ukraine is presented in the Senate. The emergency funding measure, which would send $60 billion to Kyiv and $14 billion to Jerusalem, easily cleared a critical hurdle on Sunday that could lead to the full chamber passing it soon. But the bill faces major opposition in the Republican-controlled House of Representatives.
Israel hits back after Moody’s downgrade. The ratings agency lowered its sovereign rating on Israel due to concerns about the war in Gaza and the weakening of the country’s “executive and legislative institutions.” Israeli officials, including Prime Minister Benjamin Netanyahu, responded over the weekend that Israel’s economy would bounce back “the moment we win the war.” Stocks in Tel Aviv rose on Monday.
Taking stock of the recent wave of layoffs in the technology sector. Companies including Microsoft, eBay and Snap have cut 34,000 jobs since the start of the year as they focus their efforts on developing products around generative AI, the Financial Times reports, citing data from Layoffs.fyi. One analyst suggested the layoffs had just begun.
A critic criticizes Tesla
Tesla shareholders have had a tough time lately, with the automaker’s shares falling amid concerns about the electric vehicle market and a barrage of unflattering headlines about Elon Musk.
Then more bad news came during Sunday’s Super Bowl.
A wealthy nemesis bought advertising time during the game. The Dawn Project, a nonprofit sponsored by tech entrepreneur Dan O’Dowd, used two expensive dates to call for a boycott of Tesla, part of the former Senate candidate’s long-running crusade.
Citing a recent Washington Post investigation into deaths and injuries associated with Tesla vehicles operating on Autopilot, the two ads called the self-driving technology “a reckless experiment” that has “caused 33 deaths.” (Under pressure from regulators, Tesla recalled more than two million vehicles in December, according to the Post report.)
Tesla pushed back, sending the Dawn Project a cease-and-desist letter in response to previous broadcast and print advertisements. The Sunday spots generated plenty of discussion on Musk’s social media platform X, with Tesla supporters and critics arguing over the technology. (Musk himself did not comment on this.)
The state of the electric vehicle market could be a bigger problem. Tesla, which was recently overtaken by BYD of China as the leader in electric vehicle sales, announced last weekend that it would cut the price of its popular Model Y by $1,000. This follows a series of price reductions in Asia and Europe.
musk The latest move was played down as a temporary measure to boost demand in the winter, when sales tend to slow.
Tesla is also under pressure for other reasons. The Wall Street Journal recently reported that some directors of Musk’s companies had complicated financial relationships with Musk and knew about his use of illegal drugs. Meanwhile, a Delaware court rejected a nearly $56 billion Musk pay package approved in 2018.
Tesla shares have stalled. It has fallen more than 20 percent this year, the worst performance in the so-called “Magnificent Seven” group of stocks that has pushed the S&P 500 to new highs.
Even long-time bulls are getting impatient. In a note to investors last week, Wedbush analyst Dan Ives called on the board to take control of the narrative “to stop this Category 5 hurricane on Tesla’s stock.”
The latest mega deal in the oil patch
Fossil fuel mergers show no signs of slowing down as two Permian Basin producers announced a $26 billion deal on Monday.
Diamondback Energy agreed to purchase Endeavor Energy in a cash-and-stock deal. Endeavour, founded by billionaire Autry Stephens, has been the subject of takeover speculation in oil circles in recent months. (ConocoPhillips had also reportedly been exploring a takeover bid, according to the Wall Street Journal.)
The deal would create one of the largest shale drillers in the Permian, a swath of land in West Texas and southeastern New Mexico rich in oil and natural gas.
M&A The fossil fuel sector is heating up amid rising oil prices. West Texas Intermediate, the U.S. benchmark, has risen about 9 percent this year, partly due to concerns that the war in the Middle East could restrict global supplies.
Even as Washington, Brussels and other governments promote greener energy sources, Big Oil is betting that demand for fossil fuels will remain buoyant in the coming years.
Record profits have fueled the energy fusion wave, even if business execution generally lags behind. The turmoil began in October with back-to-back blockbuster deals: Exxon Mobil’s $60 billion bid for shale driller Pioneer Natural Resources and Chevron’s $53 billion bid for Hess.
Then in December, Occidental announced a $12 billion acquisition of CrownRock, a drilling company with a large presence in the Permian. And last month, Chesapeake Energy agreed to buy liquefied natural gas producer Southwestern Energy in an all-stock deal worth $7.4 billion.
Stocks keep breaking records. Will new inflation data and earnings reports continue the trend? Here’s what you should see.
Tuesday: It’s the event of the week – the Commerce Department is set to release its latest consumer price index report, with economists predicting a decline in inflation last month.
And Airbnb, Shopify, Krispy Kreme and Coca-Cola are reporting profits and offering new insights into consumer spending power.
Wednesday: Economic data releases on the calendar include the UK consumer price index and fourth quarter GDP for the euro zone and Japan. Cisco, Sony and Occidental Petroleum plan to report results.
Thursday: Retail sales are scheduled to be released. Airbus, DoorDash, Deere and DraftKings will also announce their earnings.
Friday: The University of Michigan will release its latest consumer sentiment report.
THE SPEED READING
The cost of Disney’s battle against activist investors, including Nelson Peltz, could top $70 million, making it one of the costliest proxy fights ever. (WSJ)
Italian luxury company Tod’s is being taken private in a sale to its founding family and LVMH-backed investment firm L Catterton, valuing the company at $1.5 billion. (FT)
Republican Rep. Mike Gallagher of Wisconsin, who chairs a House committee that oversees U.S. efforts to compete with China, is not running for re-election. (WSJ)
How the departure of a top Federal Energy Regulatory Commission official threatens the Biden administration’s climate plans. (Politico)
The best of the rest
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