🏌️ Golf feud

Friday, June 10, 2022 by Robinhood Snacks |
Who said golf was boring? (Steven Paston/PA Images via Getty Images)

Who said golf was boring? (Steven Paston/PA Images via Getty Images)

Who said golf was boring? (Steven Paston/PA Images via Getty Images)

Who said golf was boring? (Steven Paston/PA Images via Getty Images)

Yesterday’s Market Moves
Dow Jones
32,273 (-1.94%)
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4,018 (-2.38%)
Nasdaq
11,754 (-2.75%)
Bitcoin
$30,107 (-0.23%)

Hey Snackers,

This had better not be a viral “Stranger Things” tie-in: employees at Texas’ Amarillo Zoo are asking the public to help identify a “coyote-like” creature spotted lurking near the park last month. Thing is, coyotes don’t usually walk on two feet…

Stocks fell again, with the Dow, S&P, and Nasdaq dropping about 2% apiece, as investors prep this morning’s inflation data for May. Overseas, the EU’s central bank is turning hawkish, planning the first rate hike in 11 years as rising inflation weighs on its economy.

Bogey

1. The PGA Tour tees off against its new Saudi-funded rival by suspending top golfers, and throwing the game into chaos

Golfers, scratched… A huge controversy just teed off in pro golf. Yesterday the PGA Tour suspended 17 golfers, including major champs Phil Mickelson and Dustin Johnson, for competing in rival LIV Golf’s first tournament (now underway in London). The PGA also told remaining members they’d get booted if they left, driving a sand wedge between the sport’s most bankable stars:

  • Out of the club: LIV paid Mickelson and Johnson (the second- and third-highest earning PGA golfers ever) $200M and $125M, respectively, to join. That’s more than top-earning Tiger Woods has made playing golf in his career.
  • Loyalists: Tiger reportedly declined a nearly $1B offer to join LIV, while top pros Rory McIlroy and reigning PGA champ Justin Thomas have committed to stay with the PGA.

Money talks… Saudi Arabia’s government funded the LIV with $400M, which led to accusations that the country is “sportswashing,” or using golf to boost its global image, despite a dismal human-rights record. With that kind of cash in play, the nonprofit PGA Tour could have trouble competing:

  • Bigger prizes: LIV’s offering more prize money than the PGA Championship (which happens once a year) for each of its 10 scheduled tourneys this year.
  • Guaranteed payouts: Unlike PGA tournaments, where dozens of golfers return home empty-handed, every LIV golfer gets prize $$.
THE TAKEAWAY

You can’t just buy superstars… You also need buy-in from their fans. Unlike other upstart sports leagues (think: the XFL), LIV has essentially bottomless financial resources. But so far it’s spending more cash on golfers than fans: the only places to watch Mickelson tee off today is online, since LIV hasn’t found a TV network partner yet. If LIV doesn’t make it easier for fans to follow, it could fail, despite its huge pile of cash and long list of stars.

Play

“Call of Duty” tourney… from the cloud. Gamers will soon be able to play Microsoft's hottest console games without the console. Later this month, video-game lovers in 27 countries can play hits like “Halo” and “Minecraft” through Microsoft’s new Xbox smart-TV app. Samsung's newest line of connected TVs will be the first to offer the app, with other TV makers to follow.

  • The setup: easy. Users only need a “Game Pass” membership and a certain controller to connect and play.
  • The pay-off: Microsoft wants to focus on gaming efforts that allow them to “deliver Xbox Cloud Gaming to more players” worldwide.

Sold out everywhere... Xbox sales are trailing rivals like Sony’s PS5 and Nintendo’s Switch, despite Microsoft’s growing share of the gaming-console pie. Last year Xbox sales jumped 92% from 2020, on the back of its new Series X model release. The problem: supply-chain snags have made it harder (and more expensive) to buy nearly any popular gaming console. Now Microsoft’s betting its extensive video-game library (cue: $70B Activision acquisition) will attract players with or without the hardware.

Ready, player one: In 2019 Google tried to enter the cloud-gaming market with its Stadia streaming service, but a lack of well-known content has made it a commercial flop and its multiplayer games a virtual desert.

THE TAKEAWAY

Don’t count out cloud gaming just yet… Microsoft’s spending a record $69B for Activision because it knows the power of popular titles. If it can convince hardcore gamers that “Call of Duty” plays as well on the cloud as it does on a console, the Xbox’s days could be numbered. Not that Microsoft would necessarily mind: last year execs said that all Xboxes are sold at a loss.

What else we’re Snackin’

  • Tap: Apple’s foray into buy now, pay later lending will be unique: the loans will be entirely funded from Apple’s own cash pile. The Fruit’s even set up its own subsidiary to handle credit checks.
  • Out: Disney abruptly fired Peter Rice, the Mouse’s most senior TV-content exec and a rumored successor to CEO Bob Chapek. Rice was reportedly an “ill fit” with Disney’s corporate culture.
  • Steer: Federal regulators are expanding their investigation into whether Tesla’s Autopilot tech poses a safety risk. The probe’s been escalated to “engineering analysis,” the last phase before a recall.
  • PDF: Shares of DocuSign plummeted 20% after the software company missed earnings expectations. DocuSign reported 25% sales growth, but that was overshadowed by a $27M loss for the quarter.
  • Stitched: Online styling service Stitch Fix is laying off 15% of its salaried workforce, the latest tech company to significantly cut headcount. Stitch Fix has been particularly hit by the slowdown in ecomm.

Snack Fact of the Day

The average price of a gallon of gas in the US is now $5

Friday

  • Consumer price index for May

Authors of this Snacks own: shares of Apple, Microsoft, Disney, Amazon, Tesla, and Google

ID: 2239844