⛳ The Tiger Effect
Hey Snackers,
Wall Street’s iconic Charging Bull statue now has a crypto cousin: Miami’s bitcoin-happy mayor unveiled a 3K-pound robo-bull as a symbol of the city’s crypto bullishness. Of course it has laser eyes.
Stocks fell for a second day as investors digested signals that interest rates could rise at a faster-than-expected clip. Tech stocks have been leading the latest decline.
Tiger returns to the Masters — but his sponsor Nike may be losing influence in the post-endorsement era
Red shirts & green jackets... 25 years after his first Masters victory, Tiger Woods is teeing up once again to compete in the Super Bowl of golf tourneys today. The return of the five-time champ made headlines, especially after a serious car accident almost cost him a leg a year ago. But that’s not the only reason: Tiger, who’s famously sponsored by Nike, was spotted practicing in a pair of rival brand FootJoy shoes this week. Why it matters:
- In 1996: Nike turned heads when it signed the still unknown 20-year-old to a sponsorship deal worth a then eye-popping record $40M (nearly $73M in today’s money).
- Today: Tiger’s made over half a billion dollars rocking Nike polos, hats, and shoes ever since. He’s still a Nike athlete, and said he chose the FootJoys to help with his post-accident mobility.
- FYI: FootJoy is owned by golf-merch company Acushnet. The stock popped 3% after Tiger was seen in its kicks.
Splashy sponsorships… Star athletes' astronomical salaries are nothing new, but playing isn’t usually their primary source of income. Endorsement deals made up nearly all of Woods' $800M net worth in 2019. In return, brands get to borrow celebrity status to build credibility and rack up fans. At the 2019 Masters, Nike got $22M worth of exposure just from Tiger’s come-from-behind Sunday win alone.
The post-endorsement era is coming… While athlete sponsorships aren’t going away, big-name players don’t necessarily need brands anymore the way brands need them. The kind of Nike mega-deals pioneered by Michael Jordan and Tiger Woods are no longer inevitable for top players. See: fellow GOAT Tom Brady, who’s leveraging his social-media following to create his own apparel line. Tiger's FootJoy-clad feet could also signal the dwindling power of official sponsors.
JetBlue outbids Frontier with a $3.6B offer for Spirit, because both airlines need gates to grow
Flight costs $40… carry-on + sandwich costs $400. This week JetBlue made a $3.6B offer to buy budget airline Spirit, topping the $2.9B bid made by rival Frontier in February. Awkward, since Spirit and Frontier had already agreed to a merger that would’ve created a budget behemoth. Spirit said its board would discuss the offer before accepting either bid.
- JetBlue says its offer is best for investors, at a 37% premium over Frontier’s. JB wants to spruce up Spirit planes and add ’em to its fleet, not run a separate carrier.
- Frontier says a JB merger would boost flight prices and reduce options for fliers, since the airlines have similar routes.
- Odd couple: Analysts called the bid a “headscratcher” because JetBlue is known for perks like free Terra chips while Spirit is known for free nothing. JB also offers a business-class tier, while Spirit… doesn’t.
Spirit in the sky… needs a companion. Four carriers dominate the US airline industry: American, Delta, Southwest, and United control 80% of domestic flights. But headwinds are now forcing smaller airlines to merge to survive:
- Not enough pilots: A shortage has caused costs to soar for smaller airlines and resulted in hundreds of canceled flights.
- Not enough gates: Gates at major hubs like ATL are often reserved for the Big Four, which makes it hard for smaller airlines to add new routes.
- FYI: President Biden’s antitrust crackdown is targeting airlines, and that could ground either merger.
In sight, in mind… Presence is key for airlines and reminds consumers that they exist. You can’t book your LA weekend with an airline that doesn’t have gates at LAX. JetBlue and Frontier need access to more gates to expand into new markets. But they can’t buy gates — at least not directly. That’s why they’re willing to pay a premium for Spirit: it’s an indirect way to buy gates at major airports, a scarce resource they both need.
What else we’re Snackin’
- Zero: China extended its lockdown of Shanghai indefinitely, forcing its ~26M residents to stay home. China’s “zero-Covid” crackdown is slowing its economy and snarling global supply chains.
- Blocked: The US unveiled fresh financial sanctions on Russia — including against two of its biggest banks and President Putin’s adult daughters — in response to evidence of war crimes committed by Russian troops.
- Trolley: Uber users in the UK will be able to book trains, buses, car rentals, and even planes as Uber strives for “superapp” status. The pilot program could take flight in other countries too.
- Strike: Dave & Buster’s will splurge $835M to buy Main Event, which owns dozens of bowling, laser tag, and arcade spots, in a bid to balance its adult-focused arcade biz with a more family-friendly option.
- Jeanius: Levi unzipped better-than-expected sales as demand for its loose fits stayed strong, despite price hikes. Levi also got a profit boost from its D2C biz, which now makes up nearly 40% of sales.
Thursday
- World Health Day
- Jobless claims
- The Masters begins
- Earnings expected from: Constellation Brands, ConAgra Brands, Lamb Weston Holdings, WD-40 Co.
Authors of this Snacks own: bitcoin and shares of Delta, and Uber
ID: 2115106