The Lessons a Big Week in Sports Have for Your Portfolio

Ratings for the Beijing Winter Olympics have been a wipe out... Last Thursday, at the halfway point for the games, Bloomberg reported that ratings were down more than 40% from four years ago, when the event was held in Pyeongchang, South Korea. As of last week, only 12.3 million viewers were tuning in nightly to […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] The Lessons a Big Week in Sports Have for Your Portfolio By Berna Barshay Ratings for the Beijing Winter Olympics have been a wipe out... Last Thursday, at the halfway point for the games, Bloomberg reported that ratings were down more than 40% from four years ago, when the event was held in Pyeongchang, South Korea. As of last week, only 12.3 million viewers were tuning in nightly to either NBC, one of its sister channels, or its digital corporate affiliate, streamer Peacock. Anticipating these issues, NBC had already cut its ad rates. As Bloomberg explains... NBC anticipated about 40% fewer viewers than four years ago and cut its ad rates by a similar amount, according to people familiar with the matter. The network was trying to avoid what happened during the Tokyo games last summer, when the ratings fell below what it had guaranteed. That hurt NBC's potential revenue because the broadcaster had to give additional commercial time to advertisers to make up for the shortfall. With lower expectations for the number of people who would tune in, NBC tried to make up for pricing weakness by increasing the number of ads available. Not only is it selling space on its linear stations, it has increased the number of ads shown during the Olympics on Peacock and also on TikTok, where NBC airs clips. Why aren't people watching? While I'll admit that I haven't watched very much either, what I have seen has been filled with not only athleticism but the touching personal stories that make the Olympics so special. Among the inspiring moments... American figure skater Nathan Chen's redemption story – he commandingly took the Gold after famously flaming out in the 2018 games... last night, if you didn't flip the channel after the Super Bowl, you saw Elana Meyers Taylor take the silver in the solo bobsled, at the advanced age of 37 and after having been COVID-quarantined in a Beijing hotel room, missing both training and practice runs... and though he came in fourth and just missed out on the podium, we said goodbye to snowboarding legend Shaun White. It feels like a lifetime since he was the Flying Tomato of Torino back in 2006. It's amazing that he has hung on at the top of the sport for 20 years. But despite the usual suspense, athleticism, drama, nostalgia, and heartstring-pulling... ratings for the Winter Olympics are bad. No one really knows why, but there are a bunch of theories floating out there: - The 13-hour time difference means that it's easy to get spoiled on events before they air in prime time. - An uneasy relationship between the U.S. and China. Whether it's China's human rights track record, the trade war, or our exporting of so many manufacturing jobs over there... there's a discernible lack of warm fuzzies when most Americas think about China. - COVID-19 restrictions have left stands empty. Also, COVID concerns led the NHL to opt out of sending its players to Beijing, robbing the games of some of their most familiar stars. Most of the commentators are sitting in Stamford, Connecticut instead of Beijing... so those post-competition face-to-face interviews are COVID-canceled. So are the shots of the athletes' families in the stands celebrating and the local travel and culture videos that have served in the past as entertaining time-fillers. - Olympics fatigue – the summer games in Tokyo just ended six months ago! - Doping controversy cynicism – one of the breakout stars of the games, 15-year-old Russian figure skater Kamila Valieva, is embroiled in a doping scandal, leading some to question the credibility of the games overall. And of course, there's the single biggest reason for declining ratings: linear TV watching continues to drop in general, as cord-cutting and streaming take a bite out of all broadcasts. NBC hoped to turn that headwind into an opportunity to grow its struggling Peacock streaming service. Literally every Olympic event will stream on Peacock, which prices its premium tier at $5 per month, which is the low end of the market. NBC parent Comcast (CMCSA) has a lot riding on the Olympics, having paid $7.75 billion for the exclusive broadcast rights through 2032. While some of the headwinds – like the COVID-19 restrictions and the location in China – will go away, the bigger issue of cord-cutting and declines in linear viewing will not. As the New York Times explains... The success of the Games is critical to NBC. Even as streaming services like Netflix and Disney+ have lured millions of people from broadcast networks, sports have remained a reliable moneymaker. Last summer, we heard rumblings that Peacock was hard to use for the Olympics. NBC insists it has addressed those issues for the Winter Games... I have so far heard mixed things about the changes to the user interface on Peacock. But only time will tell whether NBC can convert those Olympics watchers into more permanent Peacock paying subscribers. --------------------------------------------------------------- Recommended Links: ['God Code' Now Programmable]( For the past 50 years, developers and programmers used the binary code to create every piece of software you use today. But now, highly specialized programmers are using a different code to make everything from vaccines to plant products to data-storage devices and more. McKinsey, a leading consultancy, claims this code will usher in a $4 trillion industry. And Wall Street is starting to take notice. The man CNBC nicknamed "The Prophet" says he's found the one little-known company that has the potential to rule this industry and become America's Next Big Monopoly. [Get the full details here](. --------------------------------------------------------------- [Former hedge fund manager reveals $1 trillion opportunity]( Enrique Abeyta spent 20-plus years on Wall Street finding some of the biggest investment opportunities in the world. Today, he's identified a $1 trillion tech opportunity, and he's just revealed his favorite four stocks to play the world's hottest megatrend. [Here's everything he's saying](. --------------------------------------------------------------- Last night's Super Bowl provided an opportunity for NBC to get a ratings boost for the Olympics – and push Peacock some more... I lost count of how many mentions of Peacock happened during the big game, as well as how many ads that NBC ran for the service – but suffice to say, it was a lot. The most charming of its attempts was certainly the ad in which Fresh Prince of Bel-Air alum Will Smith digitally crowd sourced covers of that show's iconic theme song, in an indirect promotion of the gritty reboot, Bel-Air, which premiered on Peacock yesterday (you can watch the ad [here](. This year NBC had two opportunities to try and seize on the post-Super Bowl ratings lift... it aired the Olympics on its linear channel after the game and timed the Bel-Air premiere to coincide with the game as well. We know the Super Bowl lead-in to the Olympics was highly anticipated by NBC, because the network actually cut a deal with rival CBS to have the Super Bowl broadcast rights this year. In order to match up the Super Bowl with the Olympics, NBC got CBS to swap years with them (CBS aired the Super Bowl last year, when NBC was supposed to). As I write this, we're still awaiting the ratings for the Super Bowl itself. Last year, the traditional TV audience for the game was down 10% but the streaming audience was up 48%. The Super Bowl streamed on the premium Peacock service, not its ad-supported one. Both Peacock and ViacomCBS's Paramount+ are hoping sports rights will help attract subscribers to their services and help elevate them in the streaming ranks. We'll need to fast-forward a few months to see if Peacock's prospects were sustainably enhanced by either the Super Bowl or the Olympics. One thing there's no doubt about – Super Bowl ads keep getting more expensive... This year set a new record of $7 million for a 30-second spot. At times, it felt like an endless run of sports betting ads and cryptocurrency trading ads... Source: Twitter/@Hedge_FundGirl The pandemic era fascination with speculation was not only encouraged, but mocked... One of my favorite ads featured the E-Trade baby reluctantly coming out of retirement when he is told "They're taking financial advice from memes." (Click [here]( to view.) Big Tech made its mark on the Big Game with a hilarious [Alexa ad from Amazon (AMZN)]( featuring real-life couple Scarlett Johansson and Colin Jost, and [Meta Platforms (FB) served up a sentimental take on the metaverse]( featuring a discarded plush animatronic figure from a Chuck E Cheese clone – it was mostly panned but I kind of liked it. Tesla (TSLA) perma-bears had to be pleased with the rush of ads for electric vehicles ("EVs") from every auto company except Tesla... The biggest crowd pleaser of which had to be [the one from General Motors' (GM) Chevy]( that assured us – almost 15 years later – that Meadow and AJ actually did make it out alive from that diner in the series finale of The Sopranos. [GM also scored with an Austin Powers reunion]( featuring its EV line up, and honorable mention to [BMW (BMW.DE) for an amusing spot]( featuring Arnold Schwarzenegger and Salma Hayek as Zeus and Hera enjoying an electric ride. The ads may have been all fun, laughs, and a healthy dose of turn-of-the-millennium nostalgia – just like the halftime show – but the takeaway from these Super Bowl ads is that competition is heating up in the EV space big time. If you are scrambling to find some flowers – you apparently aren't alone... My friend Nick Mazing, Director of Research at financial platform Sentieo, put out a piece on Friday exhibiting the annual spike in the search term "roses" that occurs every mid-February... Source: Sentieo You probably knew this. What you might not have known, is that there is also a dramatic jump in searches for pregnancy tests in the second half of March... Source: Sentieo Nick comically titled this short report: "People are So Predictable, Valentine's Day Edition." Happy Valentine's Day to all! After all the Super Bowl ads encouraging you to speculate, I offer a reader letter in defense of Robinhood (HOOD)... What were your favorite Super Bowl ads? Do you stream sports, or do you still watch them on linear TV? Are sports a big factor in your decision to keep paying for cable/satellite service or when choosing streaming services? Why do you think Olympics ratings are down so much? Any Peacock fans out there... if so, what do you watch on that streaming service? Share your thoughts in an e-mail by clicking [here](mailto:feedback@empirefinancialresearch.com?subject=Feedback%20for%20Berna). "Berna, I wanted to share my positive experience with Robinhood. "Around 30 years ago, just starting out with little kids, I began my 'investing' career by purchasing one share of stock of Coca-Cola (KO) for one daughter, and 3M (MMM) for another daughter through a company called the Temper of the Times, and then enrolling those shares in the respective company's Dividend Reinvestment Plan. This was intended to be the start of their college funds. 3M has been fabulous and have kept the fees for direct investing at essentially zero all of these years. Coke, on the other hand, has not been nearly as profitable and has also raised their fees over the years for direct investing to around 5%, which in my mind is ludicrous and makes it nearly impossible to make any money even with dividends. "This is where Robinhood comes in. When I learned about Robinhood in early 2020 and their commission-free stock investing motto, I simply transferred the KO shares to my new Robinhood account and set-up a monthly auto-invest to continue building the account. (This daughter didn't end up finishing college, so we never used the money.) My point in all of this, is that with all of the bad that Whitney seems to heap on Robinhood, I have had a very positive experience with them, so far. The customer service has been quite good, and the simplicity of the app has been very user-friendly for my purposes. Further, the app has been quite helpful in my learning about options trading. "To be honest, I also really like the Tastyworks platform for most of my trading/investing, but for me Robinhood was like learning to ride a bike with training wheels. It certainly has its place, has done an outstanding job at introducing trading and investing to the younger generations, and I still use it for these auto-invest accounts. "My nature is to take responsibility for my actions. If I dive in and buy GameStop (GME) or AMC Entertainment (AMC) at the top thinking there's no stopping them, or want to play options like the blackjack table, that is my prerogative. I don't get to choose the consequences for my actions, but I certainly also have the choice not to do these things. I'm not saying Robinhood has never done anything wrong, but I see them more like any other broker rather than the evil doer that many others paint them to be." – Don T. Regards, Berna Barshay February 14, 2022 If someone forwarded you this e-mail and you would like to be added to my e-mail list to receive e-mails like this every weekday, simply [sign up here](. © 2022 Empire Financial Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Empire Financial Research, 601 Lexington Ave., 20th Floor, New York, NY 10022 [www.empirefinancialresearch.com.]( You received this e-mail because you are subscribed to Empire Financial Daily. [Unsubscribe from all future e-mails](