Hello! Today we're talking deals — sports deals, handbag deals, and the deals kids make with parents like "just 5 more minutes on Roblox, please":
Betting on the mouse
ESPN, a division of the family-friendly giant Disney, announced on Tuesday its strategic entry into the fiercely-contested arena of sports betting.
To join the fray, ESPN is walking down the aisle with gambling powerhouse Penn Entertainment. However, Penn isn’t coming to the union empty-handed — the company is stumping up a staggering $2 billion to the sports network over the next decade, allowing the gaming firm’s current sportsbook to rebrand to ESPN Bet.
PENN shares surged 20% on the announcement, but the real winner of the deal appears to be the controversial figure Dave Portnoy. He has acquired his sports media group Barstool Sports back for a single dollar… just a few years after selling the company to Penn for $551m to roll into its sportsbook offerings. The rough-and-tumble nature of Barstool’s content presented a compliance nightmare in a heavily-regulated market like gambling.
And we’re off
When a groundbreaking Supreme Court ruling expanded the scope of sports betting in the US — from just Nevada and three other states to now encompass 34 states — the industry immediately, perhaps unsurprisingly, boomed. And, like the athletes everyone is betting on, the companies are competing intensely. Penn's sportsbook faced stiff competition from FanDuel and DraftKings, which have together secured over 60% of the market, per data from Eilers & Krejcik Gaming.
With the market booming, ESPN clearly couldn't sit on the bench any longer.
Hard mode
Roblox, the popular virtual gaming platform, disappointed investors with its latest quarterly report, revealing another net loss as the company’s costs grew, sending shares down more than 20%.For those who prefer the physical world over the virtual, Roblox is an innovative twist on traditional video games. Its users are overwhelmingly the architects behind the interactive content and games that populate the platform, with a creator community that spans from impassioned hobbyists to professional studios, who profit from the sale of virtual goods and advertising.
Although the business side of the company may have faltered, the virtual world’s grip on its players has tightened. Its daily active user base has increased almost threefold since the beginning of 2020. Indeed, more than 66 million individuals immerse themselves in the virtual environment on a daily basis — almost equivalent to the entire population of the United Kingdom logging on.
Final boss
Perhaps in a bid to change the headlines, Roblox unveiled its virtual Roblox Career Center yesterday, which will give select job applicants the ability to conduct their interviews in Roblox. That means using their avatars as emissaries for the entire communication — as if interview etiquette wasn’t already hard enough to get your head around.
Choo choo
Tapestry, the parent company of Coach, Kate Spade, and Stuart Weitzman, is set to add Michael Kors, Versace, and Jimmy Choo to its bag after striking a deal to acquire Capri Holdings in a deal reportedly worth some $8.5 billion.
The 6 brands netted a collective $12 billion in revenue last year and, according to Tapestry CEO Joanne Crevoiserat, will combine to create “a new powerful global luxury house”, presumably with an eye on competing with European behemoths like LVMH and Hermès.
Michael Kors is very much the jewel in the Capri crown. In the last financial year, MK’s bags, accessories, and clothing accounted for ~70% of Capri Holdings’ sales, and the company eked out a 22% operating margin on those sales, better than the 14% managed at Versace, and the 6% for Jimmy Choo.
Of Kors it makes sense
Coach and Michael Kors have been locked in a handbag war that has raged for nearly a decade. In recent years, Coach has gained the upper hand thanks to a careful strategy: don’t over-expose in department stores, re-target the younger demographic with pop-up shops and new designs, and use more sustainable materials. That trifecta has worked, with Coach able to steadily raise prices — hence some analysts seeing this deal as a final victory for Tapestry.
But, negotiations were presumably fierce and Tapestry is having to reach very deep into its luxury purse. The agreement has been struck at $57 for every Capri share, a whopping 59% premium over the average from the last 30 days.
• 4,000 steps each day could be all you need to extend your life according to a new scientific study — less than half of the regularly-touted, and sometimes regrettably-missed, 10k figure.
• Waymo and Cruise’s robotaxi fleets have been given the green light in San Francisco, with the autonomous driverless cabs allowed to navigate the city streets 24/7.
• A new book alleges that golfing great Phil Mickelson has bet over $1 billion on sports over the last 30 years, losing $100 million in the process.
• An insightful visual exploration of how food waste impacts the environment.
• Somehow, chart making feels good in a place like this: a statistical analysis of Nicole Kidman’s notorious AMC ads.
Quick cut: Which company, where workers just struck a new pay deal reportedly worth $170k a year, is seeing a totally-not-surprising uptick in interest from potential new employees? [Answer below].
