August in Review
Each Monday, Athena employees receive a recap of important news stories from the past week. On Thursdays, our morning meeting is dedicated to a quiz testing our ability to retain the information. A free lunch is the reward for the winning team. We’re a competitive group, and the quizzes bring out that spirit. Over time a number of our clients have requested our weekly review as well, so we’ve begun to share a recap at the end of the month. See below for what we’re paying attention to and why.
Big Tech Makes a Play for Sports
Big Tech has set its eyes on a new industry: live sports. Apple, Amazon, and Google have begun negotiations for the media rights held by the NFL, MLB, F1, and college conferences, The New York Times reports. In particular, companies are competing to replace DirecTV for the rights to the NFL Sunday Ticket, which The League hopes to sell for more than $2.5 billion.
What’s the Score?
- In 2021, sports accounted for 95% of the most viewed programs on television.
- As competition increases between platforms and stock prices waver, streaming services have turned to sports in hopes of expanding viewership and profitability.
The Slow Process of High-Speed Broadband
Nine months after the $1 trillion infrastructure bill passed, the $42.5 billion allocated for broadband internet expansion has largely been at a standstill, according to The Wall Street Journal.
What’s Happening: The infrastructure bill requires new broadband maps from the Federal Communications Commission (FCC) to be established before funding can begin. The goal is to ensure broadband deployment reaches those it intends to benefit; and reporting is that past efforts have gone awry due to flawed maps.
What’s Next: Internet Service Providers must file FCC reports by September 1 showing where they can provide high speeds. Maps should be prepared by mid-2023, and federal funding could begin late-2023.
All-In on Manufacturing Security
The $50 billion CHIPS and Science Act was signed into law in an effort to boost domestic semiconductor manufacturing, Forbes reports.
Overview:
- The plan is intentionally front-loaded, with $19 billion designated over the next 12 months to support chip manufacturing in the U.S.
- Since the CHIPS Act is labeled as emergency spending, funding has been fully secured
- The rest of the bill’s provisions, like establishing new offices at the Dept. of Commerce and National Institute of Standards and Technology, still require congressional appropriation.
Why It Matters: Semiconductors are as ubiquitous and integral as the technology they make possible. From cell phones to cars to televisions, semiconductor chips are required by the dozen for each of these products. The U.S. currently ranks 10th in global research and development spending; lawmakers and industry experts on both sides of the aisle are recognizing the need for this once-in-a-generation investment in science and technology.
The IRA and the IRS and the YOU of It All
The Inflation Reduction Act (IRA) includes $80 billion in new funding for the Internal Revenue Service (IRS). Half of that will go towards improving operations and services, and the other half will focus on tax enforcement for the highest-earning taxpayers, writes The Wall Street Journal.
Takes Money to Tax Money: Currently, the IRS is funded at $13 billion for FY 2022; the $80 billion over 10 years is independent and additional to variable annual Congressional allocations. This new funding is framed as an investment to rebuild the long-overlooked agency that has a backlog of some 17 million unprocessed tax returns (they process around 500,000 per week).
The Impact: Hiring and implementing new processes will take time, but audit frequency will increase for those earning over $400,000 per year. The goal is to reduce audit probabilities for those below the $400,000 mark while providing taxpayers with more efficient and accurate support.
The Ups and Downs of Six Flags’ New Strategy
Six Flags CEO Selim Bassoul is responding to recent poor performance with an ambitious plan to boost profits by raising prices and attracting higher-earning families, Fortune reports.
Attendance at parks was down 22% last quarter, and share prices are down 40% since Bassoul took over as CEO last November. In response, Bassoul has cut marketing spend, reduced full-time staff by 25%, and significantly raised prices on annual passes.
The Takeaway: On the one hand, Six Flags is following industry trends set by Disney and Universal Studios: elevated food, better layouts, and shorter lines that help consumers feel the value of their purchase. But analysts say Six Flags has not marketed these improvements, leaving customers confused about price increases and investors suspicious of the strategy.