More Than Just Data: Precedented Times Please, an Economic Juggernaut, and a Solid Deal.
It’s been a busy news cycle recently (mild understatement) and it feels doubtful that the pace is going to slow down anytime soon. One of the bigger stories this week was the announcement of X (aka Twitter) and SpaceX apparently moving their headquarters from California to Texas at some point in the future. Lots of talk around this news has been focused on regulations, “business friendly” environments, taxes, etc., but what is not being discussed as much is the math behind the move.
A post on LinkedIn caught my attention (and, of course, I can't find it again) but it was asking how many people work at these companies and how many would be asked to move. A quick Google search says that 13,000 people work at SpaceX and 1,500 at Twitter. Let’s say that Twitter would ask everyone to move and ask the same of 20% of the SpaceX workforce? Literally a guess. But let’s just say that this is close to correct, which means that roughly 4,000 people, give or take, would be asked to move.
The big unknown is what percent of that group would be willing to move? A company can ask people to move, but that doesn’t mean they have to accept. People have houses, families, and friends that they might be unwilling to leave behind. Also important is the fact that most of these people have options given their skill sets, a point not lost on SpaceX competitors, who have already announced openness to hiring anyone not wanting to stay. One French company (Latitude) has offered relocation assistance, visas, healthcare, and the cost of champagne for any worker who would rather move to France than Texas.
Bubbly offerings aside, let’s say it’s a 50/50 split on willingness to leave versus wanting to stay. That means 2,000 jobs would need to be filled in a city where the unemployment rate is at 3% and, if I had to guess, the tech worker unemployment rate is probably closer to 1%. Another issue is housing. At the time of this newsletter, Zillow shows 3,674 single family homes for sale within Austin’s city limits; it’s not exactly a buyer’s market right now.
It’s a long way of saying that moving HQ is not just picking up a building and placing it somewhere else. There are people involved and, while it might be better for the company on paper, the logistics to move are massive. Boeing ran into this when they moved their HQ to Chicago and promised more than 500 jobs would be in the Windy City. Turns out they were short of that number during many years of their stay. It is possible that a SpaceX move will be similar and just a handful of corporate jobs will move. Who knows if any of these things will actually happen, but it will be interesting to see if they do, and how many jobs actually move from California to Texas.
As always, here are some of the data points that caught our eye this week.
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1)??? +2
It has been an “interesting” few weeks in the political world, to say the absolute least. It started with the debate debacle for President Biden and then moved right into an attempted assassination attempt on former President Trump this past weekend before ending (for now) with the RNC convention, where somewhat of a surprise pick was made for VP. While rolling from unprecedented time to unprecedented time is beyond tiring, it has been fascinating to see how the American voter is reacting to the news and events.
The reaction to the debate was mostly as expected, but it may shock you who was moving the most. The reaction to the events of last weekend, however, was truly surprising.
2)??? $14.2 billion
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What started out as a way to try to boost sales during a typical slow time has grown into an economic juggernaut; yes, I’m talking about Amazon Prime Day. In 2015, Amazon Prime Day brought in $900,000,000 in sales. Not too shabby, but pales in comparison to what has been happening over the last few years. In 2019, Prime Day sales were $7.2 billion (the first year Prime Day was two days), and then jumped to $10.4 billion when we were all in our homes and not spending money on trips, restaurants, etc. Since then, the growth has been slower but steady and hit $12.9 billion in 2023.
This year….$14.2 billion. Not a bad couple of days.
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3)??? $2.2billion
This week the NBA and WNBA announced that the WNBA will earn $2.2 billion in the NBA’s multi-year broadcasting deals with NBC, Amazon, and Disney. This deal will include the next 11 seasons and is more than 3x the current deal the WNBA is in (which expires next year). Reports also say that it is likely that the WNBA will sell two other rights packages that could bring in another $60 million annually for the league.
On a related note, the league’s current collective bargaining agreement expires in 2027 unless either the league or the players decide to opt out. If either side chooses to opt out by November 1st of this year, then the CBA will conclude on October 31, 2025, giving the sides about a year to negotiate a new agreement. According to a report in the New York Times, the player’s union has pulled together an advisory panel which includes Claudia Goldin (who won the Nobel Prize in economics last year for her work on women in the labor market); W. Charles Bennett, a former F.B.I. agent, as well as an accountant and fraud investigator; Deborah Willig, managing partner at the Philadelphia law firm Willig, Williams and Davidson, who has negotiated on behalf of other players’ unions; Tag Garson, a longtime executive in sports and entertainment; and David Cooper, a communications specialist and professor at New York University.
As the article points out, “the professional credentials of the advisory group are a sign of the importance the union is placing on the next contract.”
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We hope you enjoyed this week’s edition and, as always, we look forward to your thoughts and hearing what stories caught your eye this week.