SPORTS

Paris Olympics Are Reigniting Debate on Whether Hosting the Games Is Worthwhile for Cities

Since the pandemic, Europeans have been inundated — and agitated — by hordes of tourists. But this year, the residents of Paris, France, might get a break from the influx of visitors, thanks to the Olympics, kicking off later today. The 2024 Games have set plenty of records with over 10.7K athletes across 329 events and 32 sports and more than 9.7M tickets sold between the Olympics and Paralympics. Yet, the Olympics have been suffering both inside and outside the arenas — with some records proving less impressive.

Wrong place, wrong time: This year’s Summer Olympics are the first since the pandemic’s end — but a bumper few years for overseas travel, sporting events, and the experience economy are not translating in the City of Love. Although ticket sales are record-breaking, the Games also have a record number of resale tickets — over 270K. Gallup predicts that the Olympics will have record-low viewership, leading some to worry whether the Games have lost their appeal.

• Delta’s CEO notes that the Olympics have deterred some travelers from visiting Paris this summer — prompting hotels and airlines to lower prices to meet reduced demand.

• The local economy has also seen a “sharp drop in sales,” indicating that foot traffic has actually declined heading into the 2024 Games.

Ready for the Close-Up

Paris 2024 might fall short on fan engagement, cultural permanence, and local impact compared to previous Olympics. But despite these gaps, it’s still set to rake in billions. Organizers expect over $1.3B from partnerships with more than 60 companies.

• LVMH ($LVMUY), Google ($GOOG), and Roblox ($RBLX) are among the 250+ brands making a presence at this year’s Games — with Nike ($NKE) marking its “largest media spend” ever for this event.

• NBCUniversal ($CMCSA) has sold a record $1.2B in ads, including $350M from first-time Olympic advertisers, with coverage spanning 5K hours.

Justifying the cost: The Olympics have come under fire for their high costs relative to returns. However, one thing is for sure: the Games aren’t going anywhere, even after the costly Rio, Sochi, and Beijing Olympics. Instead, Paris’s edition is expected to be one of the cheapest in modern history. This could offer valuable insights for the US, which will host the 2028 Summer Olympics and 2034 Winter Olympics in Los Angeles and Salt Lake City.

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LARGECAP RECAP

🎵 Universal Music Streaming Revenue Hits a Wrong Note with Analysts

Streaming helped save the music industry from piracy, but it’s now posing threats to the industry’s biggest names. Universal Music Group ($UNVGY), the world’s largest record label, reported half the streaming revenue growth analysts were looking for in the latest quarter — and no amount of Taylor Swift or Post Malone could save them.

• The label’s subscriptions and streaming revenue rose 4%, well below the 10%+ industry analysts had forecasted.

• This disappointing performance led to the company’s worst trading day since its 2021 IPO, with shares dropping over 23% amid concerns about potential analyst downgrades.

Spotify vs. everybody: For years, rights holders like UMG enjoyed double-digit revenue growth thanks to a decade-long rebound in recorded music revenue. To keep it going, streaming services like Spotify ($SPOT) have increased prices. However, much of the extra income from these price hikes has gone to Spotify itself, as the company has used its influence to lower payouts to rights holders. Labels are fighting back in court, which could decide the fate of the industry — and their revenues.

The “sure thing” for investors: There are 53 stocks that have increased their dividend payments year over year for 50+ years. Yup, you read that right: Increased dividend payments since the 70s — making them some of the best dividend growth stocks for building passive income. Want to know more about these Dividend Kings? Get the free spreadsheet from Sure Dividend.*

Markets & Economy

Grayscale faces ETF competition: Grayscale’s $9B ETH trust is converting to an ETF as major financial firms launch competing products with lower fees, echoing its January bitcoin ETF battle. Grayscale now offers ETH ETF options with both the highest (2.5%) and lowest (0.15%) fees. [Read]

NextEra Energy sees renewable surge: NextEra ($NEE) added 3K MW of new renewable energy projects in Q2, including an 860 MW deal with Google. The company is benefiting from a rise in power demand for data centers due to AI growth. [Read]

Fed rate cut expectations: A Bank of America survey shows 55% of investors anticipate two Fed rate cuts this year. Investors are now pivoting to convertible bonds, seen as a beneficiary of lower interest rates. [Read]

Business & Wealth

Autonomous vehicles gain momentum: The robotaxi industry is accelerating, with Alphabet committing $5B to Waymo, a pioneering driverless taxi service. Companies like Waymo and Tesla ($TSLA) now complete hundreds of thousands of rides weekly and are teasing new services. [Read]

Southwest Airlines shifts strategy: Starting in 2025, Southwest ($LUV) will end its open seating policy and introduce assigned seating and premium seats with extra legroom. The airline looks to boost revenue amid disappointing earnings and activist investor pressure. [Read]

Mega-backdoor 401(k) gains traction: High earners are saving up to $69K annually through this strategy, with over half of Fortune 500 companies offering the option. This allows employees to potentially double their max 401(k) contribution. [Read]

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DIGIT OF THE DAY

NBA Scores Record $76B in New TV Deal

The (media) match of the season is here, and the NBA has picked some new star players. The league has signed its long-awaited 11-year media rights agreement worth over $76B, partnering with ESPN, NBC, and Amazon. This move is set to significantly increase the league’s annual revenue while attracting younger viewers — making it an appealing opportunity for advertisers.

• Disney ($DIS), Comcast ($CMCSA), and Amazon ($AMZN) will each pay the NBA annually: $2.62B, $2.45B, and $1.8B+, respectively — more than double the value of the current rights deals.

• The WNBA will also benefit, receiving $200M annually from these deals, plus an additional $60M from other agreements, boosting its total funding to roughly six times the current amount.

Foul play: In 2022, Warner Bros. Discovery ($WBD) CEO David Zaslav commented, “We don’t have to have the NBA.” But now that their wish has been granted, they’re not too happy. WBD’s TNT Sports, which has aired NBA games since the 1980s, was recently outbid by Amazon. The NBA rejected WBD’s attempt to match Amazon’s bid, citing a lack of legal standing. It’s a common theme with tech companies, with Amazon and Apple ($AAPL) securing rights for major sports leagues like the NFL and MLS. WBD, feeling the rejection was unjust, has threatened to take “appropriate action.”