Economics in the News – Nov. 27 – Dec. 3, 2023
Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.
o The NBA’s Dallas Mavericks have a proposed sale in place for the majority stake in the franchise for $3.5 billion. The proposed buyer is Miriam Adelson and trust, casino operator of the Sands Corporation, who last week sold $2 billion of her shares in the Sands Corporation for an unspecified sports franchise later identified as the Mavericks. The sale still needs to be approved by the league’s board of governors before becoming official.
The proposed sale is the latest in major professional sports leagues acceptance of growing and fueling the popularity of sports gambling. Leagues have softened their stances on sports betting with some leagues forbidding owners to hold stakes in casinos. While restrictions on sports gambling remain on players, referees, and owners, sports gambling has been embraced by the advertising dollars it helps generate for teams and leagues. Las Vegas, the mecca of sports wagering, was once considered off-limits for sports franchises due to its reputation for gambling. However, Las Vegas now houses the NHL’s Vegas Golden Knights and the NFL’s Las Vegas Raiders, while the NFL is bringing its signature event – the Super Bowl - to Las Vegas in 2024. In addition, MLB recently approved of the Oakland Athletics’ move to Las Vegas. [The New York Times]
o While Black Friday was a success for retailers, the forecast for the remainder of the holiday season is less clear. Early suggestions are that consumers spent more over the Black Friday weekend than they did last year, but that’s credited to higher prices. Over the past few months, companies have reported that consumers are responding to promotions, like those offered during Black Friday, and shying away from large purchases.
Some large retailers, such as Target and Macy’s, are preparing for a slowdown in demand, and, in response, have cut inventory levels in recent quarters. If stores have too much inventory and have to rely on promotions to sell items, that would erode their profits. Still, the National Retail Federation has its forecast for the holiday sales from Nov. 1 to Dec. 31 to grow three to four percent compared to last year. [The New York Times]
o Tesla’s much-anticipated Cybertruck made its official debut, with the first pickups by customers who have been waiting since the model was announced in 2019. The entry-level model of the Cybertruck starts at roughly $61,000 which is $21,000 more than it had previously been projected in 2019. The high-end model of the truck – known as the Cyberbeast – starts at $100,000. Tesla chief executive officer Elon Musk has stated that the company has had more than one million reservations for the new truck.
The truck will have a range of 340 miles on a single charge, which is lower than the 500 miles promised for the highest-end model. Tesla is facing fiercer competition for electric trucks, as Ford and Rivian have beat it to the market with their own brands. The Cybertruck is Tesla’s first new passenger-vehicle model in more than three years. [The Wall Street Journal]
o Several large corporations made big commitments to aid against climate change, but many have walked back against their previous pledges. One of the companies, insurance company AIG laid out a detailed plan to stop writing policies for some of the most heavily polluting fossil fuel projects. They were applauded by environmentalists and lawmakers. But AIG, and other companies who made similar pledges, are finding that making such vows is easier than acting on them.
Amazon retreated from efforts to reduce the emissions of half its shipments by 2030. Shell Oil dropped its initiative to build a pipeline of credits through investment in forest preservation and other carbon-absorbing projects, while BP backed away from its plan to reduce emissions by as much as 35 percent by the end of the decade. A research study by Net Zero Tracker that of the more than 1,000 companies studied that have pledges to zero out emissions by 2050, 38 of them or less than four percent, are doing the bare minimum required under the Paris agreement’s goal of limiting warming to 1.5 degrees Celsius. [The Washington Post]
o ChatGPT was released to public use one year ago. Attitudes toward chatboxes and artificial intelligence technology vary widely, with little consensus over what tasks can and should be handled by bots. Newspapers have used AI to write recaps of local sporting events. Video game companies use the technology to create new characters. Software developers use it to write new code.
AI experts insist that the technology isn’t going to replace everyone’s job right away, but that it will change how people spend their time on the job. AI will help people be more efficient and productive. Along the way, users have learned what the technology is useful for in its current form and how it needs to improve. [NPR]