- Suit and Times
- Posts
- ☕ Starbucks Steals Chipotle CEO 🌯
☕ Starbucks Steals Chipotle CEO 🌯
Trumps back on X, Inflation is down, and the real cost of the Olympics
Read time: 6-9 Minutes | Total words: 1803
Business
Starbucks Gets Chipotle’s CEO
Will their portion sizes start to shrink now???
Changes are coming to Starbucks, as they ousted their CEO and replaced him with the one from Chipotle.
Brian Niccol is leaving Chipotle to take over Starbucks next month, following the dismissal of Laxman Narasimhan. Narasimhan joined Starbucks just 16 months ago, but under his watch Starbucks’ share price declined 24%, as sales dropped in consecutive quarters (including an 18% drop in China). This led to a $32 billion drop in market cap. Sounds like Narasimhan was too… laxed.
Still, despite this failure, he will be given a parting gift of almost $11 million. The American Dream.
Niccol, who joined Chipotle in 2018, will take over on September 9th. Just when you thought your morning coffee couldn’t run through you any faster, let’s now bring in the Chipotle boss…
(By the way, before Chipotle, Niccol was the CEO of Taco Bell. So he knows a thing or two about his customers having to run to the bathroom)
Following the news, Starbucks stock increased 20%, while Chipotle’s fell 9%. Under Niccol’s watch, Chipotle saw an 18% increase in revenue, including an 11% bump last quarter alone.
Temu Owner, China’s Richest Man
You’ve probably seen annoying ads for Temu pop up on various websites, or maybe you’ve even seen the search results of very inexpensive items listed on Temu when googling things. Well, whatever they’re doing, it’s working.
Temu’s owner, Colin Huang, was just named the richest man in China with a net worth of $48.6 billion, which also makes him the 25th richest person in the world.
The 44-year-old once worked at Google China and has founded several companies over the years, including an online gaming firm, an agriculture platform, and an e-commerce site, Oku. But none have taken off like Temu.
Temu was launched just 23 months ago and became the most downloaded app in this country within its first three months.
But It hasn’t been all butterflies and rainbows for Temu, as they’re currently dealing with complaints of poor customer service, late deliveries, and protesting suppliers in China. Temu has also run into some tax related issues in South Africa, while the EU is also in the process of implementing import taxes on their packages.
Huang’s spot as the richest man in China might be short lived… much like most things being bought on Temu.
Around the Water Cooler
Economy
Inflation at Lowest Point in 3 Years
You might not believe it, but year-over-year inflation just reached its lowest point in more than three years. Yesterday’s report from the Labor Department showed that consumer prices rose just 0.2% from June to July, after dropping slightly the previous month for the first time in four years.
Prices rose 2.9%, which is down from 3% in June, and closer to that 2% benchmark that the Federal Reserve has been waiting for to cut interest rates (which many speculate will come next month). It was the mildest year-over-year inflation figure since March 2021.
In July, the price of groceries rose 0.1% and are 1.1% higher than a year ago. While this might sound nice, they’re still 21% higher than three years ago…
Gas prices were unchanged and remain 2.2% lower than this time a year ago. Meanwhile, clothing and car prices dropped this past month.
More Money
Entertainment
Meta and Universal Make a Deal
Meta and Universal Music Group have reached a deal that will help artists and songwriters.
Terms of the deal were not disclosed, but the two announced an “expanded global, multi-year agreement that will further evolve the creative and commercial opportunities” for UMG artists and songwriters across Meta platforms, which include Facebook, Instagram, Messenger, Horizon, Threads and, for the first time, WhatsApp.
UMG became the first major music company to license its recorded music across Facebook, when it did so in 2017.
The announcement also said that this “reflects the two companies’ shared commitment to protecting human creators and artistry, including ensuring that artists and songwriters are compensated fairly.” It noted that they will “address unauthorized AI-generated content that could affect artists and songwriters.”
What Else to Know
Tech/Politics
Trumps Back on X
Former president Donald Trump made his return to X (formerly Twitter) on Monday with a few tweets, before sitting down with X owner Elon Musk for an interview.
The interview, despite some glitches, was streamed on X for two hours and had 1.3 million viewers. Trump was previously banned from X following January 6th, but was reinstated once Musk took over the platform. However, he never returned until Monday.
The interview began an hour late, as Musk explained there was “a massive DDOS attack on X.” A DDoS attack intentionally disrupts a site by flooding it with traffic. If many people were coming to X to view the interview, thus disrupting the site, it wouldn’t be an “attack”, unless done intentionally.
Musk’s previous Spaces interview with Ron DeSantis crashed after 500,000 people tried to listen in live. Other platforms have been able to handle streams of a million people and Musk had said that X was conducting stress tests throughout the day and would be able to handle the necessary audience.
Regardless, you can go back and listen to the entire interview here, if you missed it. Despite the technical glitches, it is nice to at least hear from one of the presidential candidates (for two hours, no less), as Kamala Harris continues to avoid all media.
In other news:
Sports
The Real Cost of the Olympics
It’s usually a lot more than anticipated
Now that the 2024 Summer Olympics are over, and the U.S. brought back the most gold medals with them, we can look back on the impact the event had.
Many Olympics have gone over budget, and this year was no exception. Paris nearly doubled their budget from their original bid, spending $8.2 billion on this year’s summer games (according to MarketWatch). Their budget was originally $4.6 billion. Inflation probably didn’t help, but this was still only the sixth most expensive Olympics of all-time.
Five of the last six Olympics have come in at least twice as high as their original budget, with the 2014 Winter Olympics in Sochi, Russia, taking the gold for most expensive at $25 billion. It’s a good thing these things only happen every four years…
Following the 2016 Olympics in Rio De Janeiro, Brazil, Rio had to cut spending on healthcare and education. The police went unpaid for two weeks. That event cost $24 billion, the most for any summer Olympics, which was 352% over budget. The economic strain of the 2004 Olympics in Athens was a contributing factor to Greece’s financial instability over the past 20 years.
Getting back to France, $3.2 billion of their spending was on infrastructure - such as improvements to highways, railroads, airports and hotels. This number was actually lower than other Olympics because Paris, already a booming city, had a lot of things in place to be able to host so many people… despite not hosting the Olympics since 1924, 100 years prior.
How much of the money Paris made back remains to be seen. But they did sell 2.5 million tickets to overseas residents, and tourists traveling to the summer games were expected to spend $2.8 billion in Paris. But still, the aforementioned Brazil Olympics lost them $2 billion. The 2021 China Olympics lost them $800 million. Which is making it harder for the IOC to find hosting cities.
That’s where Los Angeles steps in. The next host of the summer games in 2028. And when one door closes, another opens - as they have already begun preparations in the City of Angels, with construction crews beginning to build out the infrastructure this week.
Their three main projects are: expanding the rail system, revamping the airport, and renovating the downtown convention center (which will be the venue for five sports).
LA, maybe in typical American arrogance, views the Olympics as a money-making opportunity. Not an expense. Eric Garcetti, the then-LA mayor, said in 2019 that they expect to turn a $1 billion profit on the 2028 games.
Part of this thinking might be because of how financially successful the 1984 Olympics were - the last time they were hosted in LA. That summer event turned a reported $223 million profit ($670 million in today’s dollars). And this came after the huge financial failure of the 1976 Olympics in Montreal, which saddled the city with a debt of $1.5 billion that took 30 years to pay off. The following Olympics, 1980 in Moscow, were then boycotted by 65 different countries, leading LA to be the ONLY city to bid for the 1984 summer games. And boy did they turn it around.
Now, 44 years later, they can attempt to do it again. Their budget is set for $7 billion, including $900 million they received in federal funds for infrastructure and transportation improvements.
Not counting towards that budget is the $20 billion the LA Country Metropolitan Transportation Authority has spent to expand bus and rail lines. Or the $14 billion face-lift for the airport. They will also spend $54 million on the convention center.
Meanwhile, this Olympics could have other impacts on sports viewers. Paris will figure out how well the games did financially, but the TV networks are certainly pleased.
The Olympics, in this country, averaged 30.6 million daily viewers, which was an 82% increase over the last summer Olympics. And if you recall, that was in 2021, where many people were still isolating inside, looking for things to watch as the pandemic dragged on.
Due to these great ratings, this could lead to more sporting events being broadcasted during the day. At Least this time of year. According to one survey, more than 12 million employed Americans watched the Olympics while working (yay working from home!). This actually cost companies $2.6 billion in lost productivity - like March Madness on steroids. Imagine watching the World Series during the day while you work now? What sort of impact could this Olympics have moving forward?
So, to recap, the 2024 summer Olympics were not so good on Paris’ budget or American companies, but were great for U.S. TV networks, the competing American athletes, and apparently female viewers (annnnddd this one too.) LA, you’re up… all eyes turn to you.
Around the Leagues: