NFL Team Values Rose 19% This Year, Plus Samsung Was Dealt A Blow By The Consumer Product Safety Commission

By 09.16.16

morning-brew-new

“Bloated, inefficient, and bureaucratic” — Bridgewater’s leadership team, in a letter to employees describing the hedge fund’s corporate environment.

Market Snapshot

  • U.S. markets closed higher as Apple shares continued dominating, this time sparking a rally in the tech sector
  • Shares of GoPro jumped 8% yesterday as the camera company issued new updates about its Karma drone that many investors are betting big on
  • Goodyear stock rose 5% after the company reported that it would be raising its quarterly dividend a whopping 43%

Hitting A Little Turbulence

…Oracle reports sub-par earnings this quarter. Like most companies in the industry, the move to the cloud hasn’t been flawless, but Oracle still managed 59% revenue growth in its cloud division. So what went wrong? Weirdly enough, the parts of Oracle that always seem to prevail, like hardware and on-premise software, saw sales decline due to the cloud movement, but let’s not get ahead of ourselves—they still make up the bulk of Oracle’s total revenue. The future is definitely in the cloud, but at what cost for companies like Oracle? Only time will tell.

Bad, Bad…

Worse. Samsung’s had a rough month. Reports of its Galaxy Note 7 phonescatching fire due to a battery defect led to a widespread recall (over one million phones), and the final blow was dealt yesterday by the Consumer Product Safety Commission. The U.S. federal agency has ordered all users to turn off their phones immediately and seek replacements or a full refund from Samsung. The recall catastrophe is music to Apple’s headphone jack-less ears: the iPhone 7, which goes on sale this weekend, could receive a boost (not that it needs one given the impressive preorder demand). Meanwhile, in other recall news, Fiat has recalled 1.9 million vehicles after three deaths were linked to an air bag defect, just one week after GM’s safety recall. Guess it’s time to take up cycling.

Loss After Loss for Deutsche

…The German bank just can’t catch a break this year. What could be worse than failing bank stress tests over the summer? (Yeah, that happened.) How about this: being “asked” to fork over $14 billion by the U.S. Justice Department in a mortgage backed securities settlement. This could be one of the largest settlements stemming from the financial crisis (which, yes, is still a thing), and Deutsche Bank wants no part of it. It’s already publicly rejected the request, saying it won’t pay. It’s worth noting that Deutsche has only a few billion dollars in its litigation fund, and its private lawyers believe they could negotiate to a more reasonable number—perhaps in the $2 billion-$4 billion range. Good luck, Deutsche.

Everything Must Go

…U.S. August retail sales disappoint. After solid gains this spring, U.S. retail sales fell 0.3% last month—worse than the 0.1% drop that many analysts had anticipated. Where’s the love? It looks like consumption may be slowing down as consumers are pulling back their spending and worrying more about their long-term financial health. Lame. In case you were wondering, the lackluster data makes it more unlikely that Fed officials will raise interest rates at their policy meeting next week. Surprise, surprise.

Other Stories

Economic Calendar

Wait, There’s Money Involved?

You thought the NFL (and its larger-than-life players) couldn’t get any bigger? Well, think again: according to Forbes, NFL team values rose 19% this past year to an average of $2.39 billion. The cause? New stadiums and relocation. Let’s take a closer look at some of the teams:

  • After moving from St. Louis to L.A., the Rams are now worth $2.9 billion, double their worth last year. And it gets better: under the right circumstances—namely owner Stan Kroenke scoring with his $3 billion real estate project, which will include the new Rams stadium—the team could soon be worth almost $4 billion.
  • The Oakland Raiders are up 47%. While the Raiders generated the lowest revenue in 2015 (a measly $301 million—chumps), the team has a bright future ahead. The Raiders plan to either build a new stadium in Oakland, relocate to Vegas or move in with the Rams in L.A.—all likely value-adding endeavors.
  • Every NFL team generated an operating income of at least $26 million, and the league’s average operating margin was a record-breaking 24% over the 19 years that Forbes has been tracking NFL team values. Moral of the story: despite the NFL’s ongoing concussion dilemma (to put it kindly), the money keeps on flowing.

Interview Question of the Day

A blind man is handed a deck of 52 cards and told that exactly 10 of these cards are facing up. How can he divide the cards into two piles, not necessarily of equal size, with each pile having the same number of cards facing up? (Answer)

Business Term of the Day

Stripper — Yes, we know what you’re thinking. No, we’re not talking about that kind. “Stripper” is slang for an individual homeowner who “strips” the equity out of their own home through mortgage refinancing. Instead of reinvesting the capital, it’s spent on consumer goods. With more disposable income, strippers get to feel rich. Sadly, this only brings them further into debt.

Food for Thought

Olive Garden’s 21,000 Never Ending Pasta passes—seven weeks of unlimited pasta for $100—sold out in less than a second when they went on sale yesterday. Please pause here in amazement over how that’s actually a thing. If you’re (really) into pasta, good news: with proceeds going to Feeding America, Olive Garden is auctioning off 21 additional passes on eBay to satisfy its hungriest fans.

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