🏈 College athletes’ $$ problem

Monday, November 6, 2023 by Snacks
Bronny James, LeBron’s son, earns millions of his own (​​Meg Oliphant/Getty Images)

Bronny James, LeBron’s son, earns millions of his own (​​Meg Oliphant/Getty Images)

Bronny James, LeBron’s son, earns millions of his own (​​Meg Oliphant/Getty Images)

Bronny James, LeBron’s son, earns millions of his own (​​Meg Oliphant/Getty Images)

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Hey Snackers,

The return of student-loan payments has been full of blunders, but this one was spit-out-your-coffee-worthy: one borrower was told they owed a monthly payment of $108,895. The servicer had mistakenly reduced their loan term to two months from 120. Womp.

The S&P 500 had its best week of the year, surging 5.8%, after falling into correction territory the previous week. Investor optimism was fueled by bets that the Fed might be done with rate hikes, especially after the US added fewer-than-expected jobs in October and unemployment rose to 3.9% (bad news = good news?).

Spiral

1. College conferences call for federal oversight as student-athlete pay gets messy

Blow the whistle 🎶… Last week, 28 of the top college athletic conferences, including the ACC and Big Ten, teamed up to create the Coalition for the Future of College Athletics (C4FCA). The goal: lobby Congress for the first federal regulation on student-athlete paid endorsements (name, image, likeness — aka NIL deals). Right now, rules are state by state.

  • Before NIL, college athletes weren’t allowed to be compensated (beyond scholarships). Meanwhile, conferences raked in billions each year in broadcasting agreements. Since a 2021 SCOTUS ruling, student-athletes have been able to cash in on their NIL, striking deals with business from corner stores to Amazon. Now…

  • The student-athlete NIL market is worth ~$1B/year, and college sports players are seen as the “best-performing subset of influencers.”

  • Top performers: USC basketball’s Bronny James has an NCAA-topping ~$6M/year NIL earnings potential. Colorado University QB Shedeur Sanders leads college football at $4.3M/year. LSU gymnast Livvy Dunne could make $3.2M with commercials for brands like American Eagle and Vuori.

“Should be wearing Dri-FIT”… or not. Varying NIL laws have been passed in 30+ states in the past two years. Colleges say that state-by-state differences have created competitive disadvantages in recruiting, and they’ve (successfully) lobbied to get lots of rules amended or nixed. In Missouri, high-school athletes can profit from endorsements as long as they agree to attend an in-state public university (advantaging schools like Mizzou). Some colleges also have their own sponsorships, which can cause conflict with students’ deals: Ohio State bars athletes from wearing Nike competitors’ products during team events or promoting any Coke rivals.

THE TAKEAWAY

Wanna fair game? Get a ref… The patchwork of state laws around NIL opens opportunities to exploit (and create) loopholes. It also adds confusion for players, who have to navigate academics, athletics, and shifting legislation around advertising. By fighting for federal oversight, the C4FCA wants to keep everyone playing by the same rules.

Sponsored by StartEngine
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40,000+ investors put up $75MM to take on Venture Capital

T-minus 9 days: Now through Nov. 15, you can invest directly in StartEngine — aka one of the largest sites in the US for startup investing through equity crowdfunding — advised by you-know-who ↑1

A new funding paradigm: While new VC deals have dropped a stunning 46% from the highs of just two years ago, new deals in the equity crowdfunding space have actually increased by 10% in that same period.

Why 40,000+ everyday investors have already invested $75MM in StartEngine2:

  • StartEngine was ranked by Inc. Magazine as top 1% of US private businesses by revenue growth, and fastest growing private companies two years in a row (2022 & 2023)3

  • They recently acquired their competitor’s assets, SeedInvest, including an investor community that’s funded over $470 million – combined with our own community, collectively committed $1.1 billion4

  • Led by legendary CEO Howard Marks (you’ve probably heard of the last company he co-founded, Activision, which was recently acquired by Microsoft for $68 billion), with Strategic Advisor Kevin O’Leary of Shark Tank1

Your window to invest in this round closes in a little over a week — don’t miss your chance to join 40,000 investors before this offering closes for good.

Invest and earn up to 20% bonus shares.

Events

2. Coming up this week

“Heartbreak feels good”… with ticket sales like this. AMC’s second-quarter revenue growth was its best since Covid, and analysts expect more growth (this time Barbenheimer-fueled) when America’s largest theater chain reports Wednesday. Amended antitrust rules that make it easier for stars to bypass studios and make distribution deals with theater chains could boost revenue for chains. See: AMC partnering with T. Swift to distribute “Eras Tour” (which became the highest-grossing concert movie) and its deal to show Beyoncé’s upcoming concert film.

Mozz stick ETAUber could deliver hearty quarterly #s tomorrow, after DoorDash reported record food-delivery orders. In August, Uber’s revenue grew 14% and it notched its first operating profit as Eats and ride-hail grew (but freight, its logistics biz, sank). Lyft beat Q2 estimates with 3% revenue growth and shrinking losses. The food-less rival gained riders after trying to cut surge pricing to lure users from Uber, but reversed course after lower prices hurt revenue. Analysts are skeptical Lyft can lift itself to a profit this week.

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Zoom Out

3. Stories we’re watching

Piggy-bank cracks… The extra $$ Americans saved during the pandemic is almost gone, JPMorgan said. The era of stimulus checks, near-zero interest rates, and the pause on student-loan payments helped Americans stash an extra $2.1T by August 2021 — now it’s estimated that less than $150B is left. Consumer spending is still hot, but Americans’ debt has grown by nearly $3T since the pandemic, while rates’ve soared. Now that the stimulus adrenaline is wearing off, there could be economic pain ahead. JPMorgan’s prepping for more delinquencies.

Fishy situation… With US-China relations deteriorating like a carved pumpkin, America’s military has started bulk-buying Japanese seafood to counteract a Chinese ban. China, previously the No. 1 importer of Japan’s fish, cut off trade after Japan released treated wastewater from its destroyed Fukushima nuclear plant into the ocean. China said it’s a health concern, despite the UN’s nuclear watchdog’s sign-off. The US ambassador to Japan said Chinese boats continue to fish off Japan’s coast, and world leaders are calling to end the ban.

What else we’re Snackin’

Snack Fact of the Day

Australia is wider than the moon

This Week

  • Monday: Earnings expected from Dish Network, Hims & Hers Health, NXP Semiconductors, and TripAdvisor

  • Tuesday: US trade deficit. Earnings expected from Celsius, Devon Energy, Lucid, Occidental Petroleum, Rivian, Planet Fitness, and Uber

  • Wednesday: Earnings expected from AMC, Beyond Meat, Biogen, Disney, Lyft, MGM Resorts, Roblox, Take-Two, Under Armour, Warner Bros. Discovery, and Wynn Resorts

  • Thursday: Initial jobless claims. Earnings expected from Aurora Cannabis, Canopy Growth, Oatly, and Yeti

  • Friday: Earnings expected from Tyson Foods

Authors of this Snacks own shares of: Amazon, Beyond Meat, Disney, Uber, and Walmart

Correction: In an earlier version of this newsletter, we misstated that we expected US nonfarm payrolls and the unemployment rate this coming Friday. Those reports actually came out last Friday, November 3. We regret the error.

StartEngine disclosures: Reg A+ offering made available through StartEngine Crowdfunding, Inc. No broker-dealer or intermediary involved in offering. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. Please see the most recent supplement, offering circular, and selected risks.

1. Kevin O’Leary is a paid spokesperson for StartEngine. See his 17(b) disclosure, https://www.startengine.com/17b.

2. StartEngine’s investor count and investment amount includes the total number of investors and funds raised over multiple offerings and at different terms.

3. As measured by revenue growth over a three-year period. Inc 5000 source. Includes investors over multiple offerings and at different terms.

4. Includes $760M in funds raised as of May 9, 2023 via Reg. CF and Reg. A+ combined through StartEngine’s funding portal and broker dealer, StartEngine Capital, LLC and StartEngine Primary, LLC respectively, as well as StartEngine’s own raises. Also includes $470M in funds raised previously through offerings conducted on www.seedinvest.com outside of the StartEngine platform. In May 2023, StartEngine acquired assets of SeedInvest, including email lists for SeedInvest’s users, investors and founders seeking to raise funds. StartEngine Community : Count of 1.8 million is determined as the number of unique email addresses in StartEngine’s database as of 10-6-2023.

Cboe disclosures: There are important risks associated with transacting in any of the Cboe Company products or any of the digital assets discussed here. Before engaging in any transactions in those products or digital assets, it is important for market participants to carefully review the disclosures and disclaimers contained at: https://www.cboe.com/us_disclaimers/.

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